RECENT DEVELOPMENTS IN ORGANIC FOOD PRODUCTION IN : Part 3: Exporting of Organic Produce from Gisborne District

BRAD COOMBES HUGH CAMPBELL JOHN FAIRWEATHER

May 1998

Studies in Rural Sustainability Research Report No. 4 Department of Anthropology, University of

i Published by Department of Anthropology, University of Otago, P.O. Box 56, , New Zealand. 1998

Phone 03 479 8751. Fax 03 479 9095. Email: [email protected]

ISBN 0-9582015-0-1

Studies in Rural Sustainability Research reports 1. Recent Developments in Organic Food Production in New Zealand: Part 1, Organic food exporting in Canterbury. H. Campbell 1996

2. Recent Developments in Organic Food Production in New Zealand: Part 2, Kiwifruit in the . H. Campbell, J. Fairweather & D. Steven 1997

3. Men and Women as Stakeholders in the Initiation and Implementation of Sustainable Farm Practices: Organic Farming in Canterbury. R. Liepins & H. Campbell 1997

ii Contents Acknowledgements ...... iv Authors ...... iv Executive Summary ...... v

Chapter 1. Introduction ...... 1 1.1 Research objectives ...... 1 1.2 Site selection: the choice of Gisborne District ...... 2 1.3 Research Process ...... 3

Chapter 2. Contexts for horticultural production in Gisborne District ...... 4 2.1 Physical features ...... 4 2.2 Social and cultural features ...... 5 2.3 Restructuring of agriculture and horticulture ...... 6

Chapter 3. Initial development of organic horticulture in Gisborne District ...... 8 3.1 The structural position of Heinz- Wattie Ltd. in the early 1990s ...... 8 3.2 The HWL strategy for converting sweet corn growers to organic production ...... 10 3.3 The development of organic methods for sweet corn production ...... 15 3.4 The relationship between local and export organic industries ...... 18

Chapter 4. Emerging issues ...... 20 4.1 Complementary and competing firms: the impact of an increasing range of companies involved in organic exporting ...... 20 4.2 Grower concerns relating to Gisborne’s organic industry ...... 26 4.3 Emergent organic industries in Gisborne District ...... 32 4.4 Impediments to the expansion of organic production in Gisborne District ...... 37

Chapter 5. Grower decision making in Gisborne District ...... 39 5.1 Existing Decision Tree Applied to Gisborne District...... 39 5.2 Discussion of Decision Making ...... 42

Chapter 6. Conclusion: the evolution of Gisborne’s organic industry ...... 44 6.1 Key issues specific to Gisborne ...... 44 6.2 Wider issues relevant to the organic industry in New Zealand ...... 45

References ...... 47

Appendix: Methods for understanding grower decision making ...... 48

iii Acknowledgements his report forms part of the findings of a Foundation for Research Science and TTechnology (Public Good Science Fund) funded programme entitled ‘Optimum Develop- ment of Certified Organic Horticulture in New Zealand’. The authors would like to gratefully acknowledge the importance of this funding in the success of this research programme. We would also like to acknowledge the contri- bution of Heinz-Wattie Ltd. for their cooperation with our research activities. In particular, we would like to acknowledge our debt to Stuart Davis and Bruce Snowdon who contributed a considerable amount of time in assisting with the preparation of a final draft of this report, and Grant MacDonald who provided assistance in conducting fieldwork in Gisborne. We would also like to thank the many growers and other industry participants who cooperated with our research activities. Finally, we would like to thank Martin Fisher for his usual excellent standard of formatting and presentation of the final report. While acknowledging the contribution of these individuals and organisations, the final content of the report remains, as always, the responsibility of the authors. Authors Dr Brad Coombes was a Junior Research Fellow on the PGSF programme ‘Optimum Devel- opment of Certified Organic Horticulture in New Zealand’. His Ph.D thesis in Geography examined issues of rural economic development on the East Coast and Catlins Coast. His current publications provide a critical examination of the political economy of sustainable development. Dr Hugh Campbell is based in the Department of Anthro- pology, Otago University, and is the leader of the PGSF funded research programme. He has ongo- ing research interests in the development of alternative agriculture and low-input systems of food production. Dr John Fairweather is a Senior Research Sociologist at the Agribusiness and Economics Research Unit, Lincoln University. He is involved in a wide range of research activities investigating social and economic change in rural New Zealand.

iv • It has led to an increasing range of purchasers of Executive Summary organic products which has reassured many espite an almost non-existent base prior to conventional growers considering conversion 1990, Gisborne District has experienced a to organic production; very rapid uptake of organic production. • It has, however, led to the potential for competi- D tion between purchasers of organic products, The key growth area has been organic sweet corn production fostered by Heinz-Wattie Ltd. The especially sweet corn. This raises serious vast majority of organic products - by volume and questions about the current structure of tech- value - are destined for export markets. nology transfer and skills development among organic growers. It also has undermined some The rapid uptake of organics in Gisborne of the trust in the generally successful relation- District has been influenced by the following local ship established between HWL and some of its factors: early organic growers. • Further to this, there is also an emerging compe- • Local sweet corn growers display a distinctively tition over what constitutes a legitimate organic autonomous psyche towards organics (which certification process. Gisborne District is one may be related to the relative economic and site where firm-specific standards for ‘organic’ spatial isolation of the district as well as a range production are being developed and inspected of social problems which has reduced percep- by MAF Qual. This has the potential to under- tual barriers to new economic forms); mine some significant and beneficial aspects of • Broader agricultural restructuring in the District the current structure of organic certification as has seen increased land areas devoted to provided by BIO-GRO NZ. horticultural production and a move from bulk- commodity to niche production. A distinctive feature of land-use in Gisborne District is the amount of land in multiple-owner- Heinz-Wattie Ltd. (HWL) have been prominent ship and managed by Maori resource incorpora- in developing organic exporting. The following tions/trusts. Despite considerable attention of factors are of significance: local Maori to organic production, few such incorporations/trusts have become involved in • Organic sweet corn was essential to the market- organic production: ing strategy of HWL in Japan, and Gisborne District provided the most likely source of this • Several Maori properties appear suited to product; organic production: local Maori perceive • HWL has been the only significant organisation organics as suited to the communal ownership engaging in technology transfer with newly of land and many properties have had low converted organic growers; levels of applied agrichemicals, so they could • In the last two seasons, some HWL sweet corn be quickly moved through the BIO-GRO NZ growers have employed a full organic rotation certification procedures; in high value export crops using sweet corn, • However, key structural impediments to Maori peas, and squash as well as green-manure crops development, especially the issues of leasing, grown over the winter. This rotation, once and raising development capital for, communal established, represents an important develop- land will need to be resolved for future devel- ment in the context of the entire New Zealand opment of organic production in the region. organic industry where broadacre rotations of high value organic crops have - to date - proved The most significant factor in determining the difficult to establish. characteristics of organic production in Gisborne has been its terra nullius status in terms of organic The longer-term survival of organic produc- production at the start of the decade: tion in Gisborne – which now appears to be relatively assured – is dependent on local diversifi- • Unlike other regions, Gisborne District did not cation in terms of organic crops and fostering have significant levels of debate and interaction synergies among a variety of organic processing between long-term organic producers and firms. Diversification has had the following newly converted export growers; effects: • This is reflected in a more ‘pragmatic’ approach to organic production by many new growers in • It has provided the elements for a successful Gisborne District compared to other regions; rotation in organic crops; • Such pragmatism is indicated by the heightened • It created useful synergies between organic degree to which some sweet corn growers were processors/exporters - as evidenced by coop- attracted to organic production by premiums eration between squash exporters and HWL; and have stayed in organic production prima-

v rily to achieve these premiums. While the same 5) Maintenance of integrity of organic stand- Grow Organics With Watties promotional ards: as a region which lacks any long term material was used in both Canterbury and organic history, Gisborne is potentially susceptible Gisborne, some Gisborne growers took some- to activities which might undermine or ‘water what different messages from this material than down’ established notions of what constitutes their counterparts in Canterbury; organic production. MAF Regulatory Authority • Furthermore, some highly pragmatic sweet corn needs to give clear direction to exporting compa- growers will, in the next few years, probably nies by recognising a national standard for organic come into conflict with the BIO-GRO inspector- production. ate over issues of soil fertility and fallowing; • All the study regions had newly converted growers who were initially only interested in premiums but then experienced a ‘progressive conversion’ to the wider aims of the organic movement. However, in Gisborne District, the extent of ‘progressive conversion’ seems slower among some prominent sweet corn growers, a situation that is exacerbated by their disinterest in the local organisation for organic producers.

Five challenges will need to be faced in the future, if the high rate of organic development in Gisborne District is to be maintained.

1) Skills and technology transfer: a significant need for a local grower organisation commited to developing skills and knowledge among growers. All firms engaged in organic exporting should be investing in technology transfer, while the state should also be a provider of research and educa- tion in organic production.

2) Synergies not competition: synergistic development with companies cooperating to service different elements of a full organic rotation is clearly more suitable to organic production than outright competition. Again, grower pragmatism and the commitment to maintaining premiums is leading some growers to seek to strengthen their position vis-a-vis processors by encouraging competition for single crops within their overall rotation rather than finding strength through developing a full rotation.

3) Resolution of leasing and overcoming barriers to Maori development: current strategies for incorporating Maori land into organic develop- ment have emphasised leasing arrangements. These are undesirable in the long term as a form of organic production and can only be viewed favourably as a ‘stepping stone’ to independent organic production by Maori incorporations.

4) Soil fertility and encouragement of ‘pro- gressive conversion’ of pragmatic sweet corn growers: some growers will have difficulty main- taining their organic status unless they adopt a less pragmatic attitude to production and begin to address issues of long-term soil fertility.

vi Chapter 1 the certifying agency of choice in recent times. However, the 1990s have seen a considerable Introduction change which, through the establishment of a burgeoning export industry for organic food, has his report is the third in a series of four case attracted a number of new organic growers. It has studies on the evolution of organic produc- also challenged the established organic agriculture Ttion in key regional areas of New Zealand. movement in terms of its philosophical orienta- The other three case studies are Canterbury tion and infrastructural ability to certify the large (Campbell 1996), Bay of Plenty (Campbell et al. numbers of new producers. 1997) and Nelson (to be completed in mid 1998). In the Canterbury and Bay of Plenty studies, it The four reports are the main outputs for the was found that many growers who formerly research program ‘Optimum Development of produced under conventional systems converted Certified Organic Horticulture in New Zealand’, to organic production for a variety of reasons, all funded by the Public Good Science Fund. The relating to the increasing number of contradic- current report presents the findings of research tions arising in their conventional production into the development of organic production in systems. The four most prominent reasons were: Gisborne District1 (see Figure 1.1). Although these health concerns attributed to high agrichemical findings are significant and stand in their own use; the attraction of premiums for organic versus right as suitable for individual publication, some conventional products; concerns over high pro- comparisons are made in the text between the duction costs of chemical usage; and concern over evolution of organics in Gisborne and the develop- the long-term viability and sustainability of ment of organics in Canterbury and Bay of Plenty. conventional systems and products. Many in the This mainly involves comparisons between organic agriculture movement have also changed Gisborne and Canterbury, because organic crops their orientation towards the commercial potential and an individual company – Heinz-Wattie Ltd.2 – of the industry and are now interested in making have been prominent in both areas. This enables organics both commercially viable and a success- the Gisborne case study to be more fully under- ful export industry. Others saw such changes as stood. Nevertheless, extensive comparisons are unacceptable or too costly for small growers and not made in this report: they have been set aside disassociated themselves from BIO-GRO NZ. for a future publication to be completed after the There are many potential issues of interest Nelson report. which emanate from this growing commercialisa- tion and export-orientation of organic production 1.1 Research objectives in New Zealand: Since 1990, organic production has increased • What are the impediments which prevent markedly in New Zealand, with a considerable conventional growers from converting to change in emphasis in terms of the target con- organic production? sumer. During the 1970s and 1980s, production • What regional and sectoral differences exist in was largely in the informal sector – with a focus the growing New Zealand organics industry? on self-provision and bartering – or in semi- • Will suitable methods, structures for certifica- commercial sectors, with local growers supplying tion and technology evolve which allow for the local buyers or cooperatives. The domestic market successful commercialisation of organics yet consumed almost all organic produce. Organic will also maintain appropriate organic stand- production was part of a philosophical stance: a ards? direct critique of intensive methods of food pro- • Which companies are becoming involved in duction which had emerged after WWII. The organic production, for what reasons and how organic movement sought to retain the historical do they incorporate organics within their necessity for food production to cooperate with production, distribution and marketing divi- natural systems as the basis for sustainability. BIO- sions? GRO NZ – the organisation which formed in 1983 • What direction is the structure of the organic as an umbrella group for the various actors within industry presently taking and what is an the organic agriculture movement – has become

1 At various points in the text the phrase ‘East Coast’ is also used. More specifically, the study area encapsulates the Poverty Bay/Waipaoa flats, on which is Gisborne City itself, and the horticultural land near and . The Maori term ‘Tairawhiti’ covers a similar area to the Gisborne District. Also note that Gisborne District is one of the few unitary authorities in New Zealand. Hence, there is no Regional Council of which Gisborne District is a part. 2 Henceforth, HWL. During much of the period under discussion this company was called Wattie Frozen Foods Ltd., which was absorbed as an operating division of the Heinz group in 1992. This division ceased to have an independent name when Heinz-Wattie Ltd. was restructured in 1996. To avoid confusion over the changing name of the division, reference will only be made to Heinz-Wattie Ltd for the entire period.

1 appropriate industry structure that could foster study different from the other field areas studied organic production? in this series of reports: • Can the export/commercial and domestic/ Ethnic composition – Gisborne District has a philosophical components of the organic particularly high percentage of Maori in its popu- industry evolve in parallel without the former lation. Therefore, it was selected to test whether dominating the latter? cultural factors can influence the growth of organ- ics. This is particularly important in relation to These are just a few of the issues which form current patterns of Maori land ownership. the research objectives of the present series of A unique history of organics – Unlike Canter- reports. More detail on these objectives can be bury, Bay of Plenty and Nelson, there was almost obtained from Report No. 1 (Campbell 1996). no evidence of a domestic organic industry before the rapid growth of export-oriented organic 1.2 Site selection: the choice of production and the involvement of large compa- nies. The lack of industry pioneers has strongly Gisborne District influenced the style of development that has taken place in Gisborne District, and has had important It has already been suggested that there are effects on the relations among growers, the indus- similarities between organic production in try as a whole and BIO-GRO NZ. Gisborne and Canterbury, especially the role of Despite the lack of a domestic industry, or- both organic cropping and HWL. However, there ganic production has grown markedly in Gisborne are two factors which make the Gisborne case

Figure 1.1: Eastland, including Gisborne District study area.

2 during recent years, with most of this expansion 27 people. The criteria used by these growers in within the sphere of organic cropping. In the making decisions about organic production were 1996/97 season, HWL’s Gisborne suppliers grew identified and used to assess the relevance of the about 2000t of organic sweet corn (Zea mays) and decision tree derived from the earlier Canterbury organic peas (Pisum sativum), and five other study. companies exported a total of 650t of squash (Cucurbita spp., usually C. maxima). In recent years, organic fruit production has increased and recent conversions of orchardists mean that this growth will continue. Organic persimmons (Diospyros kaki) and organic wine are the main contributors to that increase. Experimentation on mixed proper- ties with a full rotation of organic crops involving sweet corn, squash, peas, and green-manure crops grown over the winter is particularly significant. This development places Gisborne ahead of comparable regions like Canterbury which have not yet been able to achieve a full rotation in high- value organic crops and stock. Some stakeholders in Gisborne’s organic industry are confidently predicting that the adoption of a full rotation will lead to sustained expansion of the local industry, establishing Gisborne as New Zealand’s premier organic growing region. 1.3 Research Process As was the case in the two reports published thus far in the current series, there were two main research methods employed in this study. Strategic Interviewing – In August of 1997, an interview program was conducted with 25 partici- pants who have a stakeholding in the local organ- ics industry. These interviews were ‘interactive’ in the sense that the form of interviewing was not the set-survey method. Rather, each interviewee was given as much room as possible to direct the structure of their interview. The composition of members in this interview program is presented in Table 1.1: Ethnographic Decision Tree Modelling – Decision making of growers was assessed by interviewing

Position of interviewee in organics industry Interview No.

Export/processing company managers and marketers 1, 2, 3, 4 and 5

Agronomists and other advisers 6, 7, 8 and 9

Managers of low-input and/or fruit production initiatives 10 and 11

Stakeholders in the (domestic) organic food movement 12, 13 and 14

Organic viticulturists 15 and 16

Organic crop (pea, sweetcorn, squash) growers 17, 18, 19, 20, 21 and 22

Organic deer farmers (both formerly organic crop growers) 23 and 24

BIO-GRO NZ representative 25

Table 1.1: Participants in the strategic interviews.

3 Chapter 2 north along the East Coast, travel was particularly difficult and until the 1920s no proper road had Contexts for horticultural been formed and towns such as Tolaga Bay, and Hicks Bay were connected by a coastal horse trail. Today, sealed roads have production in Gisborne improved access to the District, but travel times to the area remain relatively high. Gisborne is one of District the most expensive cities to fly to in New Zealand, and negligible air freight arrives at Gisborne t will be shown in Chapter 3 that many of the Airport. forces which led to Gisborne becoming a There are both negative and positive effects of Isignificant region for organic production in this isolation. Because they are not on high- New Zealand had their origin outside of the volume routes, primary producers face higher District. However, there are a number of internal costs in terms of transporting their produce to features which have helped to accelerate the national and international markets. This has development of organics in the region and have meant that agriculture and horticulture in led to the success of organic producers. Several Gisborne District have always been more marginal change dynamics have recently encouraged moves than in other areas of the country. One of the into niche production by primary producers. The positive aspects of this isolation is that a constant growth in organic production is related to this fear brought about by the marginal nature of broader trend. Three key topics will be examined: primary production on the East Coast has made some of its people reasonably progressive in terms • The growing conditions in the area, which are of adopting new production forms and new crops appropriate for organic horticulture; (Interviews 1, 2, 3, 6, 8, 23). This tendency towards • The social situation of Gisborne District, which adaptation has meant that the typical fears about has made people in the area sensitive to the organic production are, to some degree, negated. need for economic diversity and new economic Furthermore, there is considerable potential to projects; market isolation as a component of the organic • The changing relationship between agriculture image. With respect to New Zealand’s position in and horticulture, which has led to the recent global trade, HWL recognised the wider potential and rapid uptake of niche horticultural produc- of such isolation when it began experimenting tion. with organic production in the early 1990s. After the takeover of that company by H.J. Heinz Co., This brief account will draw extensively on this strategic potential was further reinforced by research previously conducted by one of the Tony O’Reilly (the CEO of H.J. Heinz Co.) who present report’s authors (Coombes 1997). That suggested that relative isolation from the environ- research also examined the social, physical and mental problems of the northern hemisphere sectoral changes in the District which have en- presented New Zealand with the ability to market couraged its people to search for new economic itself as a ‘green’ country producing healthy food. alternatives. While the early initiatives were based around HWL, members of the wider organic agriculture 2.1 Physical features movement also lend support to the idea that The first aspect of the physical geography of Gisborne is ideally suited for organic production. the area which has encouraged the growth of Bob Crowder – an important figure in the New niche production relates to the effects of spatial Zealand organic industry – met with Gisborne isolation. Gisborne was one of the more difficult people interested in organics during 1993 and frontiers in New Zealand for European settlers to suggested that: establish themselves as small producers (Oliver & Thompson 1971). To the north and west of “Gisborne’s pastoral and cropping Gisborne City, the Huirau and Raukumara Ranges industries have a wonderful chance to turn the restricted travel and trade with the northern cites District’s isolation into an asset and build an of and Hamilton (see Figure 1.1). To the environment based on balanced organic south, the rugged terrain through which the principles” (quoted in Scott 1993: 9). Mohaka river flows restricted access to Napier and . After the establishment of During his 1993 visit, Crowder also noted that Gisborne City, interaction between the area and the region’s growing conditions were particularly the rest of the country was mainly through Port suitable for producing organic food (ibid.). In Gisborne which was both shallow and based on general, the District suffers from soil erosion, but an unreliable slipway from the Turanganui River, this problem is largely confined to the hill country. so even coastal trade proved difficult. Further Large areas of flat land also exist, especially on the Poverty Bay/Waipaoa flats and to a lesser extent

4 on the Uawa River flat at Tolaga Bay and the the country, with nearly 15% actively seeking Waiau River Valley near Ruatoria. These consist of work (NZ Census of Population and Dwellings good quality soils, with a mix of yellow-brown 1991 – Gisborne/Hawke’s Bay Regional Re- loams and rich alluvial deposits. The quality of the port:11). In some towns, such as Ruatoria, the soil is such that out of the 20,200ha of flat land on Maori unemployment level is over 70% (ibid.). At the Gisborne plains, 17,000ha can be used for the governmental, Runanga3 and District Council horticulture (MAF 1968), the most resource inten- level, considerable attention has been given to sive form of primary production. The climate of new employment schemes for the area. In general, the area is particularly suited to horticultural the unemployment problems are so significant production. The mean annual temperature – that there is strong support shown when investors 14.5oC – is one of the highest for all districts in desire to establish a new type of production on the New Zealand which combines with a high aver- East Coast (Interview 9). As is the case with spatial age for annual sunshine hours to create favourable isolation, a negative factor such as high unem- growing conditions (Hessel 1981:12). The combi- ployment can lead to adaptive attitudes. nation of high average temperature and a long Gisborne District, along with Northland, is growing season means that the Gisborne District, one of only two areas in the country where Maori and especially the area towards , is well regularly comprise over 50% of the population in suited to the growing of semi-tropical and even census meshblocks. The official proportion of tropical fruits. It also means that it is one of the Maori in the Gisborne District population is 40% best suited areas in New Zealand for sweet corn (NZ Census of Population and Dwellings 1991 – production. Average rainfall is a moderate Gisborne/Hawke’s Bay Regional Report:27), but 1200mm per annum. In areas where there is a high with informal housing arrangements and the fact amount of rainfall, organic production can be that many Maori on the East Coast attempt and more difficult, because these conditions can favour succeed in avoiding the census (see Coombes the growth of weeds. 1997), that figure may well be an underestimate. However, there is one climatic factor which In several of the towns along the East Coast, negatively affects all forms of primary production Maori represent over three quarters of the popula- on the East Coast. The area is particularly suscep- tion (NZ Census of Population and Dwellings tible to cyclones and one such event – Cyclone 1991—Gisborne/Hawke’s Bay Regional Re- Bola which occurred in 1988 – persisted for four port:26-27). Maori have a considerable history of days and led to millions of dollars of crop and horticulture in the area. Captain Cook, on visiting stock losses. Given the rugged and deforested , was surprised by the techniques and nature of the surrounding hill country, soil erosion technology that were employed by Maori in their is now recognised as the region’s primary hazard, gardens, as he was by the quality and quantity of especially during abnormal cyclonic events, and is the produce. a serious threat to the long-term sustainability of In more recent times, Ngati Porou – the pre- agriculture and horticulture. After 1988, many dominant – have attempted to renew their pastoral farmers abandoned their hill-country interest in horticulture. Considerable resources land to the East Coast Forestry Project (see and land have been returned to local iwi in the Blaschke & Peterson 1994) and other commercial 1980s and 1990s as part of successive govern- forestry programs. Some farmers have diversified ments’ attempts to meet their obligations under their existing, low-country land to other, more the Treaty of Waitangi. Large areas of land have intensive uses, such as horticulture, in order to also recently come out of long-term leases which make up for this loss of revenue. Consequently, alienated Ngati Porou from their land. Increased this new phase of on-farm diversification has flexibility in how those resources are used has contributed to a recent increase in the extent of been granted by the Te Ture Whenua Maori Act horticultural activity in the District. (1993) and, utilising this flexibility, many land incorporations attempt to diversify their pastoral 2.2 Social and cultural features holdings. Some have entered wine, kiwifruit (Actinidia deliciosa) and fresh-market vegetable During 1997, a number of high-profile reports production. In the research for Coombes (1997), it on the effects of poverty in Gisborne District were was found that many local kaumatua were anx- prominent in the national media. Inadequate ious to see the re-establishment of communally- housing, poor access to health resources and the based but commercially-oriented gardens both ineffectiveness of local education systems received because of a ‘sustainability’ ethic and as part of considerable attention, and all are symptomatic of employment initiatives. Notably, several of these the wider effects of poverty. The District’s unem- leaders commented on the success of one large ployment level has typically been the highest in

3 Referring to Te Runanga o Ngati Porou, and Te Runanga o Turanganui a Kiwa – the councils of the two major iwi in the District.

5 organic farm4, and stated that they wanted to changes threatened the long-term viability of follow this lead because it was seen to be particu- pastoral agriculture. By the late 1970s and early larly appropriate for the nature of their land, and 1980s, it was recognised that pastoral agriculture the composition of their hapu. was considerably more marginal in Gisborne During the 1990s, Maori have returned to their District than elsewhere, and it was accepted that Gisborne turangawaewae in considerable num- its extent was upheld mainly by state subsidies, bers (Butterworth 1991), but they are not the only especially supplementary minimum prices group to migrate there in recent times. The migra- (SMPs). When SMPs were removed, stock num- tion of ‘lifestylers’ to the region is a strong dy- bers reduced rapidly through the 1980s and the namic for economic change in Gisborne District Kaiti freezing works suffered from serious levels (Coombes 1997). Public perception of this group is of under-capacity. With the post-Bola move to that they are generally uninterested in pursuing forestry, this problem worsened and, in 1994, the employment. However, not all lifestylers move to Kaiti works closed. the East Coast for recreational pursuits and many Although the closure had a considerable arrive with considerable assets. The East Coast is a impact on the collective psyche of the region, the growing destination for international tourists. move was simply the climax of a more long-term Many such tourists have decided to emigrate on shift away from pastoral agriculture. In its place, the basis of their holiday experiences, and several horticulture has become more prominent. Crop have already become involved in such ‘alterna- production, especially for tomatoes, grew rapidly tive’ economic practices in Gisborne as ecotourism in the 1950s when J. Wattie Canneries Ltd. estab- and ‘health’ industries. In the other reports in this lished a cannery in Gisborne City. Pea, bean and series, migrants from Europe and ex-urban sweet corn production further expanded when lifestylers were shown to have had an important Watties added a freezing operation to their role in the evolution of organic production. Al- Gisborne plant in the 1960s. Fruit, especially though there is less evidence for such a role in stonefruit and citrus, were processed for a period Gisborne District5, there is a some potential for of time, and lower quality maize – used mainly as future involvement by this group in the Gisborne a stock feed – has been significant since the 1950s. organic industry if their numbers continue to Forestry was also part of this program of diversifi- increase. cation. The East Coast Forestry Project had its roots in a governmental scheme established in 2.3 Restructuring of agriculture 1967, which had land stability and employment objectives. and horticulture From this platform, the process of diversifica- tion increased significantly in the 1980s. Around The first European settlers of the Gisborne that time, horticultural production was seen as the area believed that the district was most suited to key to Gisborne’s future. Sixteen kiwifruit or- pastoral forms of agriculture. For over one hun- chards were established on the Uawa River flat dred years, extensive sheep farming was the main with a pack-house at Tolaga Bay, and many other economic activity on the East Coast and a number kiwifruit orchards were developed on the Poverty of large pastoral estates developed. Likewise, Bay/Waipaoa flats. The country’s largest single Maori land incorporations also tended to conform vineyard was planted in the , near to this faith in large-scale pastoral agriculture. . Other vineyards were established in areas Apirana Ngata introduced a series of Maori land which had no history of grape production. Those reforms in the 1930s which were adopted on a areas which did have a history of viticulture, national basis, but the degree of amalgamation especially the Poverty Bay/Waipaoa flats, saw the and centralisation of Maori land was greatest expansion of the production of Chardonnay and amongst his own iwi of Ngati Porou. The success Riesling varieties. When the citrus industry was of this economic form was dependent on the deregulated in 1982, orange orchards also in- continuation of coastal shipping around the East creased on the Poverty Bay flats. As HWL consoli- Coast. Large wharves were built at Tolaga Bay, dated its tomato processing operation in Hastings, Waima at , and Hicks Cedenco Foods Ltd. opened a tomato processing Bay, and with each was associated a relatively factory in Gisborne City in 1986 and sought to small freezing works. During the inter-war period, increase the level of tomato production. At the this proved successful but, with the decline of time of its peak operation in the mid-1990s, coastal shipping, all of these freezing works had Cedenco was supplied by 8 large growers and closed by the 1950s. Even though the Kaiti freez- another 50 small growers as well as leasing con- ing works in Gisborne City expanded to replace siderable quantities of cropping land under its the smaller freezing works, these infrastructural

4 The manager of which was interviewed for the present report (Interview 18). 5 See Section 3.2.1.

6 own name. There was considerable optimism in the 1980s that Gisborne was undergoing a period of fortuitous economic restructuring which would see a successful diversification of its primary production. However, an article in the first edition of the Gisborne Herald for the 1990s, suggested that this diversification program was failing: “The 1980s were a decade that promised much but produced little” (Conway 1980:8). With recognition of oversupply in the wine industry, the vines at Waiapu were uprooted. For kiwifruit growers, declining world prices after 1988 and Cyclone Bola combined to devastate the industry in Gisborne and the kiwifruit packhouse at Tolaga Bay closed down. At one point up to 50 kiwifruit orchards had been planned for the area around Tolaga Bay, but only three survived after the closure of the packhouse. The most notable failure was the collapse of Cedenco in 1996, only two years after a considerable expansion of its Gisborne factory6. Nevertheless, these aspects of the region’s diversification from agriculture to horticulture have been replaced by other horticul- tural ventures which are more small-scale in their orientation. Macadamia (Macadamia ternifolia), feijoa (Feijoa sellowiana) and avocado (Persea gratissima) production in the East Cape region has grown considerably during the 1990s. Other ‘exotic’ foods such as persimmons, mandarins (Citrus reticulata) and truffles (Tuber melanosporum) have also been grown in recent times on the Poverty Bay flats. Specialist markets also devel- oped, such as the supply of fresh vegetables, especially squash and onions, for export and off- season production of broccoli for the Japanese market. In general, diversification from agricul- ture to horticulture in Gisborne District did not fail completely, but has increasingly been targeted towards niche operations. With the area’s growing conditions being appropriate for ‘exotic’ fruits and crops which need long growing seasons or off- season production, specialised production of value-added horticultural goods appears to be the best hope for Gisborne District. Organic fruits and vegetables are just one type of these niche prod- ucts.

6 The major part of Cedenco’s operation – its tomato processing facility – was transferred to Australia. Some processing activity remains at the Gisborne plant, but this is very limited compared to the scope of the company’s influence in the area during the period 1992-1996.

7 Chapter 3 changing status and structure as a company. All these factors have bearing on the type of organic Initial development of sweet corn operation that developed in Gisborne in the early 1990s. organic horticulture in 3.1.1 Motivations for organic exporting In the first report of this series (Campbell Gisborne District 1996), Heinz-Wattie Ltd. was shown to have n the previous chapter, it was established that played a major part in the development of organic both agriculture and horticulture in Gisborne exporting from Canterbury. In that case, the main District are undergoing a period of substantial export goods were peas and carrots, but the I motivating factors for producing those goods are restructuring. That restructuring has incorporated two dynamics: first, a farm-level move away from also relevant to the development of organic sweet dependence on pastoral production and into corn in Gisborne, especially as the strategy for mixed-production including horticulture; and, both provinces emerged in tandem. Campbell second, movement of horticultural operations into (1996:25ff) identified four factors which influenced value-added and niche production. The purpose HWL’s decision to pursue organic product lines: of this chapter is to evaluate how those dynamics have affected the evolution of organic horticulture • Preserving access to First World markets. The in Gisborne District. The chapter concentrates experiment with organics was only one part of largely on the activities of one company – Heinz- this strategy, but quickly became its most Wattie Ltd. (HWL) – and its efforts to establish an successful component; organic sweet corn operation since 1991. The close • The unfavourable position of bulk commodi- attention given to HWL reflects two important ties in the world vegetable market in the 1980s characteristics of the initial development of and 90s which required experiments in market- organic horticulture in Gisborne District. Whereas ing. Improved marketing became an even the Canterbury (Campbell 1996) and Bay of Plenty greater priority when H.J. Heinz Co. took over (Campbell et al. 1997) cases highlight how com- Wattie Frozen Foods Ltd.. The new manage- mercial exporting of organics can grow out of an ment brought a more marketing-oriented existent domestic industry, export of organic food approach compared to the production focus of from the Gisborne area grew rapidly despite the prior owners, Goodman Fielder Wattie Ltd. inherently low levels of domestic production and (Interview 1, see also Roche 1996). consumption of organic produce. The second • Organic production was also considered to be characteristic of the initial moves towards the desirable because it added value to existing export of organic produce is the dominance of products without requiring a costly restructur- HWL in organics between 1992 and 1995. Chapter ing of processing facilities. 4 evaluates the increase in small and medium size • In part, HWL was responding to requests from companies entering the organic industry since that Japanese buyers regarding the ‘clean and time, as well as the increasing range of organic green’ qualities of HWL products and some products grown in Gisborne, but in the first half of companies specifically desired an organic this decade HWL and its sweet corn growers were product. While HWL already marketed its the industry pioneers, so the company warrants mainstream produce as the result of less specific attention in this chapter. chemically-intensive production methods than the market alternatives, by linking the main- stream product to a fully organic product, 3.1 The structural position of market performance was improved. Organic Heinz-Wattie Ltd. in the early products could act as a ‘keyhole product’, improving the market standing of mainstream 1990s products, and gaining access to new, previ- ously disinterested buyers. Given the initial dominance of HWL in the evolution of Gisborne’s organic industry it is Campbell (1996) also identified another factor pertinent to examine the motivations of that which was the independent conversion of previ- company with respect to organic production. The ously conventional and long-term HWL growers motivations for HWL’s organic sweet corn initia- to organic production in Canterbury, which tive cannot be separated from either the wider 7 provided HWL with some organic product to ‘Grow Organic With Watties’ program , the chang- export. This did not occur in Gisborne where there ing fortunes of its conventional products or its

7 The HWL promotional program for attracting conventional growers to organic production. See Section 3.2.3. Henceforth, GOWW.

8 were almost no existing organic growers who corn) than were HWL in Hastings, or could be contracted to grow sweet corn. Feilding. Some difficulties concerned the age and position of the Gisborne factory. Given its close 3.1.2 The specific need for organic corn in proximity to the sea and to the Turanganui river that runs through Gisborne City, and with the frozen mixes requirements of the Gisborne District plan for There were, however, some factors that sepa- discharges to water, the possibility of expensive rate HWL’s motivations for developing organic plant upgrades has been mooted for some time production in Gisborne from what occurred in its (Interview 18). other supply regions. Sweetcorn was always going Other difficulties were directly related to the to be an integral part of the larger HWL organics main product in the factory – sweet corn. There program as it can be used in combination with were two main factors that influenced the sweet peas and carrots to create new products for the corn operation during the 1990s. First, the global Japanese market. Peas and corn are able to be sold market in frozen sweet corn has been subject to separately, but there is less demand for organic strong fluctuations in supply which have im- carrots and they are not sold as an individual pacted on world prices. Consequently, in some product. Organic carrots have been successfully seasons the factory operated below capacity marketed, however, using a pea/carrot/sweet (Interview 1, 2). Second, the emergence of corn mix which is popular in the Japanese market Cedenco Foods Ltd. in the mid-90s created an (Interview 1). Consequently, production of organic increased demand for land previously used for sweet corn has enabled HWL to expand its prod- sweet corn. This culminated in 1994/95 when the uct range from a focus on peas, to include sweet cost of land rentals soared, as did crop prices, with corn, and mixed vegetables. This made sweet corn HWL increasing its sweet corn contract price by an important part of the HWL strategy for Japan, around 20% and establishing a system of partial and as the best growing conditions for sweet corn forward payment to growers to meet the Cedenco in the vicinity of HWL’s four freezing plants are in challenge. While Cedenco’s demise can be par- Gisborne, it is clear as to why HWL was particu- tially attributed to the unsustainable aspects of larly interested in fostering organic production in this competition, HWL’s sweet corn operation the region. survived. The combination of world market Furthermore, organic sweet corn tends to fluctuations and competition with Cedenco raised attract a higher premium in the market than other a number of questions regarding the future for the organic frozen vegetables (Interview 2), and sells sweet corn operation at the Gisborne factory. at between 40-50% more (per processed tonne) Interviewees from HWL Gisborne drew a clear than organic peas or carrots (Interview 1). These link between the pressures on the Gisborne factory high premiums help to offset higher costs of in the 1990s and the potential for organic sweet- production. To a significant degree, therefore, the corn (and also pea) processing to underwrite the growth of organic horticulture in Gisborne District future of the factory. One HWL staff member is accounted for by its suitability to grow one highlighted the relationship between these pres- particular crop that meets one company’s specific sures and the development of organics: sourcing and marketing needs. Many of the other organic crops/companies in Gisborne have devel- “The only future for the plant here is in oped in a successional or ancillary nature8 to the organics. So we’ve got out there and promoted HWL sweet corn operation and there is some it. Our jobs are on the line, so we’ve been doubt as to whether they would have been estab- particularly keen for the Grow Organics with lished so easily in the absence of organic sweet Watties program to be a success. We’ve prob- corn production. ably adopted it as our own more than the other Watties field areas have” (Interview 8). 3.1.3 The status of HWL’s Gisborne plant A second set of factors which separate the These concerns about the factory’s future – HWL motivations for organics in Gisborne from which have created a local dynamic within HWL the company’s wider organic strategy concerns Gisborne towards organics – have been accentu- the status of its Gisborne plant. Even before the ated since the Heinz takeover. The Heinz com- Heinz takeover of HWL, it was evident that the pany sets very challenging targets for returns on Gisborne factory was the most vulnerable of the investment, targets which have led to a rethink four frozen goods factories. Despite having two throughout the HWL group about the structure additional factories on site – “Best-Friend” pet and operation of each of the manufacturing foods and “Asahi” frozen prepared meals – HWL facilities, including those at Gisborne. In July of Gisborne was more dependent on one crop (sweet 1997, these pressures culminated in the announce-

8 See Chapter 4, especially Section 4.1.

9 ment that the pet food and prepacked meal opera- program, it nevertheless proceeded with that tions would be transferred to Hastings9. As this operation in 1990/91 without the conversion of report was being written, further plans are in many conventional growers. It was able to do so progress to sell the frozen vegetables plant to a because Canterbury had a history of domestic ‘co-packer’ company, which would then be placed organic production from the 1970s, with many on long-term contract to supply HWL with both long-term organic growers already certified with conventional and organic produce. This is por- BIO-GRO NZ. A further bonus was the presence of trayed as a ‘win-win’ situation: Heinz would have growers who had been long-term HWL suppliers reduced its exposure in terms of fixed costs and but had independently converted to organic could concentrate on its high-profit marketing production prior to HWL’s organic strategy. activities, while a local company would probably Initially, a number of these organic growers signed find the return on investment more than adequate organic contracts with HWL Christchurch, and compared to the high targets set by Heinz. many remain as key suppliers. In the case of Whatever the outcome of these negotiations, Gisborne during 1991, however, only two indi- the long-term move towards an increasing organic viduals of note were BIO-GRO certified – a wine throughput for the HWL Gisborne plant seems set grower with no available land or desire to grow to continue. This is apparent in the current season, sweet corn and a deer farmer with limited for which increased volumes of sweet corn have amounts of potential land. Consequently, the lack been provided from a slightly reduced number of of a domestic organic industry posed a consider- contracts. Proportionately, organic sweet corn able barrier to HWL’s desire to establish organic production continues to increase. In the 1997/98 sweet corn production in Gisborne District. season, 15% of all crops grown for HWL Gisborne will be organic and this increasing proportion 3.2.1 Attracting long-term organic looks likely to continue for the immediate term (Interview 1). growers In this context HWL Gisborne were: “prepared to break our own rules to get the organics pro- 3.2 The HWL strategy for gram off the ground” (Interview 1). Usually, HWL converting sweet corn growers identify six preferred features of cropping land to decide whether they will contract an individual to to organic production grow sweet corn (Interview 1):

Therefore, the motivations for HWL’s • Flat even paddocks for uniform crop develop- Gisborne interest in organics were a mix of global ment and optimum machinery operation; trends, company strategy, the suitability of the • Larger paddock sizes are preferred for opera- district for sweet corn production and a local tional efficiency; dynamic rooted in the status of its Gisborne • Well drained soil, because wet soil reduces factory. When these trends combined to inspire a yield and quality and impedes the use of serious attempt at establishing organic sweet corn machinery; production in 1992, however, a further complica- • Good natural fertility, soil structure and no tion arose. HWL Christchurch had experienced major weed problems; several problems in establishing its organic opera- • Access for heavy vehicles; tion in the Canterbury province from 1990/91 (see • Fenced to keep out stock. Campbell 1996). Conventional growers had been slow to react to the premium for peas and, ini- Aside from the specificities of the land to be tially, few were convinced to proceed with the 2-3 used for sweet corn production, there are other year transition process to obtain BIO-GRO certifi- qualities that are also preferable for sweet corn cation. Although HWL Christchurch ultimately suppliers: depended on its ability to attract conventional growers for the long-term success of its organic

9 The primary cause of this transfer relates to the closure of Gisborne’s Kaiti Freezing works two years earlier. This freezing works supplied the majority of the meat off-cuts to ‘Best Friend’ pet foods with the rest being trans- ported in through Hawke’s Bay. Without the freezing works, “Best Friend” was required to import all its meat off- cuts and offal from other centres and it was deemed appropriate to shift that particular part of the plant to a centre with a meat processing industry sizeable enough to supply all off-cuts from local sources. A second reason for the relocation was that the Gisborne plant was old and needed to be upgraded even if it remained in Gisborne. Overall, the plant relocation demonstrates the Heinz influence on Watties NZ, especially in terms of accelerating the restructuring of the processing divisions in order to meet investment targets. 10 A considerable amount of land is contracted at some distance to Gisborne, but a sliding payment scale is used which places the burden of extra transport costs onto the grower, not HWL. Consequently, closeness of land to the factory can be a factor in the overall package as to whether a grower should engage in a contract with HWL.

10 • Land should ideally be situated near to the reasons. factory to assist the logistical management of There is an interesting comparison that can be the crop10; made to Canterbury at this point. In Canterbury, a • For organic production (and to a lesser extent number of long-term/philosophically-oriented for conventional), HWL preferred to deal with organic growers produced high crop yields for producers exhibiting a particular ‘mind-set’11. HWL in the 1990s. In Gisborne, no long-term organic growers, who were previously inexperi- Although HWL committed most of its promo- enced with sweet corn, were able to match the tional effort for organics to courting their conven- average yields of conventional sweet corn growers tional growers, initially they approached long- who converted to organic production. Conse- term organic growers and growers who had no quently, HWL Gisborne, even more than HWL experience growing sweet corn but had suitable Canterbury, began to rely on converting conven- land to convert. This was especially the case if tional growers to advance the company’s strategy HWL felt their land could comply with the BIO- for organic sweet corn. GRO certification process quickly because they had records showing that chemicals and fertilisers 3.2.2 Attracting Maori land trusts had not been used on it for some time. In fact, With those three growers and also with two HWL’s first organic sweet corn grower (1991/92) conventional growers certifying small portions of did not display a number of the preferred qualities their properties, HWL could source sweet corn as summarised above: his land was 60km north of from a total of 7ha fully certified and a further Gisborne near Tolaga Bay; his property had been 15ha of BIO-GRO transitional land for the 1992/93 severely flooded by Cyclone Bola four years season14. However, this area was too small to earlier and suffered drainage problems; and he ensure the sustainability of the project. In solving had never grown sweet corn. He was also (fortui- this problem of insufficient supply, HWL Gisborne tously) interested in experimenting with organic explored relatively new territory in terms of sweet corn for philosophical rather than purely grower-processor arrangements: it proactively financial reasons. assisted Maori land-use trusts on multiply-owned The grower initially provided about 1.5ha of land into organic production. Despite the fact that BIO-GRO certified land and produced sweet corn 12 only a few trusts/incorporations entered into at 6t/ha . The following year the land area was organic production in the area, this arrangement increased to 3ha and he achieved 10t/ha (Inter- and its outcomes are given special attention here view 23). After four years he discarded sweet corn for two reasons. First, with such a large proportion production for two reasons. First, his main inter- of available land in Gisborne District under ests were in deer farming and he felt “that the multiple Maori ownership the ability of Maori to sweet corn thing was a bit of a challenge. After it enter the industry may be a key factor in the long- was up and running it was no longer a challenge term growth of organics in the region. Second, the and I didn’t want it to be a distraction from my 13 Maori influence is a local characteristic that sep- efforts in organic deer farming ” (ibid.). Second, arates Gisborne from the three other case studies he had become dissatisfied with the overall in the present series of reports. direction of HWL’s sweet corn operation. He is The first trust to enter organic production – “fundamentally opposed to monoculture and any Paripoupou Station – is representative of the operation that preserved the old paradigm of situation for much of the Maori land in Gisborne large-scale, soil-compacting horticulture” (Inter- District (Interviews 7, 9). When the government view 23). In the period 1992-1994, two other sought to purchase a large block of land ranging individuals from non-horticultural backgrounds from Tolaga Bay (50km north of Gisborne) to became involved in growing organic sweet corn Tokomaru Bay (85km north of Gisborne) in the largely for philosophical reasons, but both have 1860s, a number of Maori owners refused to sell. since pulled out citing philosophical and other

11 “We just know often whether they will be able to do it – most can’t. They have to be innovative, the type of grower that will chase premiums” (Interview 2). For the specifically organic producers, the need for innovation was even more apparent: “We do not want growers who are just financially driven to change to organics. The mind-set must also include a willingness to adapt, to take on a challenge, a preparedness mentally to go against convention. Some conventional growers we recognise do not fit this bill” (Interview 1). 12 A typical conventional sweetcorn property achieves 18t/ha. However, this particular grower was happy with this as a first effort and considered the premium a bonus. 13 See Section 5.3.1. 14 Most of this was to be sold as ‘Transition BIO-GRO’. Although HWL could obtain a premium in Japan for crops ‘in transition’, this was lower than that which could be achieved if the produce was fully certified. However, HWL was prepared to set the ‘Transition BIO-GRO’ sweetcorn price for its growers at 70% higher than for its conventional crops (ie. not much lower than the 80% premium for full BIO-GRO certified organic) so that the two years of transition would not act as a barrier to growers converting to an organic regime.

11 Even though these owners had a shareholder cided to continue with the conversion of the interest in the entire block of land, a contract property. After several months of negotiations, resulted which gave those owners a 120ha ‘reser- they agreed to year-by-year contracts with HWL vation’ at Three Bridges (Interview 19, Oliver & to supply organic sweet corn on 45ha – more than Thompson 1971:99) – 65km north of Gisborne. double the total of organic and transitional land Initially, there were 11 owners but over the next that HWL had to that point contracted – but still 70-80 years the number of owners swelled through lacked the start-up capital to realise their dreams. multiple inheritance customs to over 600. In the HWL became relatively proactive at this stage, early 1950s, the station fell into rates arrears, enacting the following initiatives to ensure that largely because it was unable to attract loan Paripoupou was successful. The company: finance15 to expand and compete with Pakeha station-farms. A compromise was established in • Made internal preparations to loan Paripoupou the Maori Land Court under which the owners development capital if no other source could be would retain title but only if they leased the land found (something it almost never does for on a long-term basis to a Pakeha station-farmer. conventional growers, Interviews 1, 2); The long-term lease was due to expire in 1992. In • Began third party negotiations with the local advance of that date, however, Cyclone Bola member of parliament and Te Puni Kokiri (1988) had its greatest impact in the Three Bridges (henceforth TPK)16 to gain Mana Development area, and up to three metres of silt was deposited Fund capital. These negotiations led to a on the river flat portion of the property. In the suspensory loan of $100,000 being made by years between Bola and transference, the leasee TPK which was used for land restoration, carried out no remedial activities, applied no including a requisite drainage program (Inter- fertilisers nor chemicals and allowed weeds and views 7, 9, 19). This money also helped the two metre high rushes to infest the property station gain a $200,000 overdraft from a private (Interview 19). When the shareholders – now bank; numbering over 1000 – regained management • Gave Paripoupou an “unusually large amount control in 1992 they were in no financial position of advice for their initial learning of growing to remedy these problems and it was used for little methods”, including assistance in finding a more than occasional grazing, with its long-term farm manager/agronomist to help with finan- potential in some doubt. cial and crop decisions (Interview 7); HWL became aware of the land through a • Mitigated the loss Paripoupou made in the first share-cropper who desired to grow maize on the year by writing off the value of seed. Because property as a leasee (Interview 2). When that of the late decision to plant organic sweet corn, individual asked to switch the contract to organic and the considerable effort required to clear sweet corn, the shareholders’ trust pulled out of 45ha of neglected land and prepare a seedbed, the agreement, fearing that control of the land the crops were sown very late in a season would again be taken from them on a long-term which was unusually cool and wet, resulting in basis (Interview 7). At this point HWL – “desper- a low-yielding first crop. (Interview 1, 19). ate for any potential organic land they could get their hands on” – attempted to convince the land By 1997, Paripoupou had changed its status trust to convert to organic production because the with the Maori Land Court to an incorporation, land had effectively been in fallow for years reflecting its successful standing as a business. It (Interview 2). The Paripoupou Trust was initially had 65ha of BIO-GRO certified land which were interested in organics because it thought it would suitable for cropping and had grown sweet corn be a labour intensive activity which could be used for five seasons. The Incorporation has recently to employ some of the large number of local diversified into squash and peas as part of its unemployed (Interviews 7, 19). HWL informed organic rotation. All concerned parties appear them that this would not be the case because happy with these outcomes. For its part, mechanical methods could be used for weeding Paripoupou overcame its initial problems and in and harvesting, but the shareholders’ trust de- the third season made a $100,000 profit. Although

15 It is prohibitively difficult for land trusts and incorporations to attract private finance capital as banks are not prepared to take the risk that is entailed in lending money to managers of land in multiple ownership. Al- though, there have been changes to the appropriate Maori land legislation – especially in the form of the Te Ture Whenua Maori Act 1993 – this situation largely remains today. 16 Te Puni Kokiri had itself been restructured in the year before these negotiations and this represented almost the last payment of Mana funds. The Mana program had been a feature of the old Department of Maori Affairs which had a proactive developmental mandate and start-up capital for innovative developmental projects on Maori land. In contrast to this, TPK has basically an advisory role and there is little capital available for Maori today that would match this loan. Consequently, there is some doubt as to whether similar operations could eventuate at present and the successful conversion to organics by Paripoupou had much to do with serendipity.

12 some of this money has had to be used to over- organic production. From 1994, that incorporation come a poor 1996/97 season, it has been able to started to convert land previously unused or used purchase new machinery and “future-proof itself for pastoral farming and in 1994/95 produced against another Bola by putting a lot of money in transitional sweet corn for HWL. However, it had the bank” (Interview 19). The manager of a strong desire to be more than just a ‘supplier’ of Paripoupou also believes that organics is in an input without a value-added component keeping with the stewardship beliefs of Maori on (Interview 7). Having attracted a loan from a the East Coast. Both HWL and TPK showcase the governmental source, it invested large sums of property as “something special, something unique money in a slush-ice machine for the export of which shows that Maori can be innovative, that organic broccoli, with the desire to grow, process large multinationals don’t have to be rotten and and market produce itself. It also invested heavily that both can work together” (Interview 2). in mechanical weeders and other horticultural Despite this success, one could not yet claim machinery. With little knowledge of horticulture that Paripoupou provides a future blueprint for or international marketing and with a sizeable organic development in the area. Because of the exposure in terms of fixed-capital, the second difficulties experienced in successfully establish- incorporation lost a considerable amount of ing Paripoupou as an organic producer, HWL has money in the 1996/97 season (Interviews 7, 19) subsequently proceeded with caution in dealing and was subsequently dropped by HWL for being with properties which are characteristic of the “too risky to deal with” (Interview 8). It will Maori norm: land in multiple ownership; land continue to operate for the 1997/98 season and its which has been damaged by flooding; or owned managers still believe in their ability “to cut out by people who are inexperienced sweet corn the middle-men: the processors and the market- producers. Some of these concerns have acted as ers” (Interview 4). Given three years of heavy impediments to negotiations with land incorpora- losses, this belief seems somewhat naive. The tions and HWL have not rushed to repeat the losses have led to processors and packers who Paripoupou situation: might otherwise have considered fostering Maori organics to be wary about dealing with all Maori “Paripoupou was a classic case of...‘we’ve trusts/incorporations (Interviews 4, 7, 9). got to get this program rolling, we’ll take it!’ Given the extent of Maori land, and also the Well if that same property came up again we’d Maori desire to become involved in organics run a mile because the land is too marginal which is seen by some to “conform to our environ- and the start-up costs too high” (Interview 8). mental ethos” (Interview 9), there is significant potential for organic agriculture on Maori land in “Well it happened because we had to go Gisborne District. After a cooling off period from nothing to something right away. And following the effort to establish organic produc- getting conventional growers to go organic on tion on the two properties, HWL has recently any sort of scale at all takes time. Now that we attempted to re-establish the development of have sufficient conventional growers that have organic sweet corn production on other Maori converted we are not likely to go to the same land. In 1995, an incorporation approached HWL effort again” (Interview 2). with land that met HWL’s criteria, but the result- ing HWL offer was met by a better offer from There were a number of other reasons which another processor not involved in organics (Inter- concerned HWL managers and agronomists about view 2). Another venture emerged in dealing with Maori land. Other individuals from where HWL began to lease land from local Maori Maori land trusts had contacted HWL and had owners (several properties having multiple promised considerable amounts of flat land that ownership arrangements) and to develop what could go through the BIO-GRO process quickly was again silty, weed-infested land, for sweet corn but, on further investigation, HWL found that production. In this development, the local owners these agents had no authority to do so (Interviews took no part in the actual production of sweet corn 2, 8). Some Maori owners were also reported to but simply held the leases and cooperated with expect HWL to incur more of the start-up cost HWL’s contracting arrangements. By 1997/98, this than was usual. During this period, HWL rejected development included five properties and 100ha an offer of 800ha – which would have doubled of land in transition to BIO-GRO certification for HWL’s contracted organic land – from another sweet corn. The Wairoa project is seen by HWL as incorporation primarily because its location near an experiment which may overcome some of the Ruatoria was too far from the factory, but also perceived difficulties in working with land that is: because of other prevailing concerns about Maori in multiple ownership; run by committees; poorly incorporations (Interview 2). developed because of restraints on the owners’ Perhaps the greatest threat to the potential for ability to raise finance capital; and owned by organics on Maori land came from difficulties people with no prior experience of sweet corn experienced by a second incorporation to attempt production, but with a desire to become involved

13 in organics (Interview 1). 3.2.3 “Grow Organic with Watties” The various successes and failures in the The recruitment of growers for organic pro- developing relationship between HWL and Maori duction in Gisborne differs to the pattern seen in incorporations indicate both the positive potential Canterbury where a variety of possible growers of such relations and the barriers that need to be were contracted in the initial rush to build a overcome for these developments to continue. A supply base (even though these growers were vital factor in Paripoupou’s success was Mana often, in hindsight, less than suitable). In Canter- funding, and while HWL was prepared to con- bury, it was eventually recognised that the main sider a loan in 1992, its supply base is now more potential for boosting grower numbers lay with firmly established and such an offer is not likely to the company’s established conventional growers. eventuate in the future. The Wairoa development Because of the absence of a significant group of indicates a possible new phase in this relationship. established long-term organic growers in Recent decisions by the BIO-GRO board to allow Gisborne, HWL recognised from the outset that certification of long-term leased land have enabled conventional growers would most closely conform HWL to consider leasing land from both Maori to the desired criteria for converting to organic and non-Maori owners. sweet corn production. GOWW is a promotional Leasing of land allows some concerns to be and literature campaign developed in response to overcome that have acted as barriers to HWL 17 difficulties experienced in recruiting growers for considering Maori land , and this may increase HWL’s organic program. Its main goals are to the number of hectares of organic land owned by dispel misinformation about organic production Maori incorporations in the future. However, and to transfer organic information to growers18. while this will extend organic production, the As such, it was primarily targeted to conventional lease arrangement will almost certainly not carry growers who had long-standing relations with the same range of benefits for Maori development HWL, especially those that were considered than the alternative model evidenced by innovative and who might follow the lead of the Paripoupou. It can be argued that HWL’s new company (Interview 1). It included a series of direction towards leasing Maori land rather than informational brochures which were sent to allowing local owners to work the land them- growers and outlined the premiums for – and the selves is overly cautious and it will be perceived small amount of change required to enter – or- by some as paternalistic. In recent years, there has ganic agriculture, but also included group discus- been a groundswell of Maori concern in Tairawhiti sions, a media campaign, showcase exhibits of over incorporations that seek profit over employ- organic farms and public lectures. Private and ment in their use of Maori land (Coombes 1997). individual negotiations with growers have always While the Paripoupou example yielded little in been the primary strategy of HWL recruitment. terms of employment, it represented a direction From 1993 the more organised and broad ap- that would be far more acceptable to the impover- proach of GOWW contributed to an increased ished Maori that have fuelled this groundswell number of conventional growers interested in than leasing. More importantly, Ngati Porou organic production contacting the company. development since 1945 has suffered because of a The component of the GOWW strategy that, in forced dependence on leasing. For this reason, hindsight, was of most interest to many growers, many local Maori will be unimpressed with a new was the promotion of a premium for organic over direction towards leasing, even if such a direction conventional production19. It had been considered appeals to their trustees whose range of options is by HWL Gisborne that conventional growers were severely limited by the Te Ture Whenua Maori unlikely to convert to, and sustain, organic pro- Act. duction unless there was a net premium of around 20-25% (Interview 2). This incorporated the need

17 It is possible that leasing will also be positively perceived by some Maori growers and, in certain circum- stances, by BIO-GRO NZ. Because of the underdeveloped state of some Maori land, potential growers may be borderline in terms of whether they would be certified by BIO-GRO NZ. In this context leasing could reduce the start-up risk for both HWL and the land owners and provide a better chance of certification for the land owner at a later date, after HWL has dealt with land-based impediments to organic production. It is probable that BIO-GRO would favour this use of leasing as a stepping-stone to organic production by the land owner. However, it is too early to tell whether this scenario will be a reality and it is unlikely that more than a few Maori incorporations, which become involved in organics through leasing, will eventually adopt organic production in their own right. 18 For further information see Report No. 1 (Campbell 1996:25ff). 19This has, at times, been a contentious issue. Both in Canterbury and Gisborne, there was some debate within HWL as to the extent to which the premium should be used to convert growers. Some argued that the premium might not last in the long-term and that growers should convert for other reasons. Others countered that many of the growers were primarily interested in the premium, and some agronomists based their discussions with inter- ested growers around the potential premiums.

14 applied to Gisborne, Sweetcorn (Jubilee) Peas appears to be even more price premium price premium important than in other $/tover $/t over areas, especially when conventional conventional one considers the initial difficulties brought Conventional 140 – 305 – about by the lack of long-term organic Transitional 240 71% 365 20% growers to act as pio- neers. The success of Organic 255 82% 380 26% GOWW has occurred both despite and be- Table 3.1: Average price (in $NZ) paid by HWL per (pre-processed) tonne to cause of the uncertain Gisborne growers 1992-1993 to 1995/9620. (Sources: HWL Gisborne Gross Mar- future for the Gisborne gin Report on 1997 Crop; adapted using information from Interviews 1, 2, 8, plant. While uncertainty 17, 18, 20, 22) has acted as a barrier to some growers convert- to transparently account for the additional costs in ing to organic production (Interview 1) – particu- growing organically, including an account of larly given the plant restructuring announced in additional labour required for mechanical weed- June 1997 (Interviews 17, 22) – for other conven- ing and opportunity costs such as the inability to tional growers it had the opposite effect, prompt- graze cattle over winter. After some initial ‘guess- ing the move to organics in order to ‘save the timates’ considerable research was conducted to Gisborne plant’ (Interview 20). ascertain both sweet corn and, later, pea prices. In the next Chapter, it will be established that 3.3 The development of organic these price premiums result in a gross margin (per hectare) premium of over 30%. Despite this methods for sweet corn premium, HWL initially struggled to convert its Gisborne growers, especially in 1992/93. A signifi- production cant turnaround occurred in 1993 when one of the In many respects, the long-term success of the more highly respected of the local growers com- GOWW campaign is dependent on how its con- mitted himself to an organic regime. Unlike other ventional sweet corn growers perceive the suit- conversions, that grower rapidly transferred his ability of organic methods. If the methods devel- entire property through BIO-GRO certification, oped thus far appear to work successfully, then adding 135ha of land in three years to HWL’s the typical fears of many growers – reduced soil organic sweet corn operation (Interview 18). This fertility, weed infestation and difficulties manag- has created a growing sense of legitimacy for ing pests – will be proven unwarranted and organics in the district and has led to the conver- growers will be more likely to convert. Again, sion of other conventional growers (Interviews 1, Gisborne differs to other regions, where pioneer 2, 8). Another factor which has accelerated conver- growers had already established some (or all) sions is the success of technology that HWL methods required for successful organic produc- sourced for growers in 1994 – part of the informa- tion in the region. Consequently, this section will tion transfer objectives of GOWW. Conventional review the methods for organic production of growers had considerable fears of weed infesta- sweet corn and other organic crops produced in tion on organic sweet corn properties, but machin- Gisborne as they have evolved over the last 6 ery imported from the US has countered this years. problem (Interview 8). By August 1997, HWL had 10 growers either in transition or fully certified 3.3.1 Growing organic sweet corn for with BIO-GRO, with at least a further six growers registered for certification and hoping to be ‘in commercial horticulture: fertility issues transition’ by the 1998/99 season (ibid.). There are two main types of sweet corn grown In 1998, HWL now has over 2000ha of transi- worldwide: ordinary and supersweet. Ordinary tional or certified land under its growers in New sweet corn is mainly grown for processing, while Zealand and 405ha of this is in the Gisborne area. the supersweet varieties (which include both While Canterbury has a greater number of hec- yellow and bi-coloured) dominate the fresh tares of certified land, Gisborne is remarkable for market, but are also being used increasingly for the speed with which new land has been con- processing. In Gisborne, HWL mainly uses two verted. Thus, the GOWW program, as it has been varieties. Ordinary sweet corn is predominantly

20 After 1995/96 the premium was markedly reduced. This change is discussed in Section 4.2.2.

15 the Jubilee variety, while supersweet is usually the organically certified stock can break down the SS42 variety (Interview 6). Planting of both Jubilee nitrogen into a soil-ready form. Other growers and SS42 is staggered from late September to mid have been loathe to abandon the mustard because December, when soil temperature and moisture it is reputed to cleanse the soil of pesticide fall within an acceptable range. Both varieties are residues from previous land use and fungal harvested from late January to early March. pathogens. Compared to other crops, sweet corn is relatively Initially, some within the organics movement resource depleting and appropriates significant were less than happy with this arrangement quantities of nitrogen from the soil (McLaren & (Interviews 2, 25). It was argued that sweet corn Cameron 1990:206). Not only does it have a long demanded a fallow (in, for example, clover – growing time – 100-110 days for the varieties another nitrogen-fixing plant) every second favoured by HWL – but it also requires consist- summer because of its tendency to deplete nitro- ently high levels of nitrogen at all periods of its gen. HWL and growers recognised, however, that growth. This meant that organic sweet corn was a if a cash crop could only be produced half as significant challenge for HWL agronomists and often, growers would consider organics less growers relative to their other crops – especially feasible than conventional production. All parties, peas – which are less demanding on soil fertility. including the growers, HWL, and BIO-GRO NZ Traditionally, significant quantities of urea have are in agreement that in the long term repeated been used to maintain soil fertility on sweet corn summer cropping of sweet corn will most likely be properties, which is not acceptable under BIO- unsustainable. Thus, there is a significant need to GRO organic standards. develop a system of crop rotation. In the interim, Some of the fertility enhancing methods the current system of production has been treated adopted for other commercially grown organic by the inspectorate as an ‘experiment’ to deter- crops were also applicable to sweet corn produc- mine appropriate fertility management strategies tion. Reactive rock phosphates (RPRs) are slow for sweet corn. As such, this resembles the BIO- release fertilisers which are allowable under BIO- GRO board’s position on ‘restricted’ inputs, which GRO standards. Fearing long-term fertility prob- are acceptable in the short term if there is no lems, organic sweet corn growers in Gisborne viable organic alternative, but must act as a District have applied RPRs at 300-450kg/ha, stepping stone in the development of more sus- claiming that this is relatively high compared to tainable practices. use on organic crops in other regions (Interview With support from HWL agronomists and 18). Fertilisers derived from fish products are also scientists the option of a winter fallow from other used as a crop dressing two to three times a year. nitrogen-depleting sources (eg. a winter crop such Other typical organic applications include lime as broccoli) and a green manure crop grown over and the restricted use of cobalt21 as a supplement, winter was adopted. Although this necessitates which are used to counteract a local soil deficiency some opportunity costs22, it means that the sum- brought about by high levels of siltation on flood- mer work calendar for organic sweet corn growers prone land. is manageable and not so far removed from the Because of high demands on soil fertility, the situation for conventional production that the first technical barrier to the development of conversion gap is prohibitive (Interview 2). This organic sweet corn was the need for a ‘green’ position appears acceptable to all parties in the manure crop – a crop which would aid soil fertil- immediate term, although the long-term desire of ity and could be ploughed back into the soil. both HWL and the BIO-GRO inspectorate is to Essentially, the first experiment – a mixture of create a sustainable full rotation in organic crops. lupin (Lupins angustifolius, notable for its nitrogen This closely resembles the situation in Canterbury, fixing abilities) and mustard (Brassica nigra) grown although recent developments in Gisborne sug- over winter months and ploughed in one to two gest that a full rotation of squash, peas and sweet months before planting of the sweet corn – has corn is now possible and is being used by an proven reliable in the short-term, though it is still increasing number of growers. In the following too early to evaluate its long-term merit. Both the chapter, this report will present the differing lupin and the mustard are ploughed into the soil opinions of growers as to whether the full rotation wherein the plant mass breaks down to release will be sustainable in the long-term or whether a available nitrogen to the summer crop. Some summer fallow will still be required to maintain growers have altered this mix by decreasing or soil fertility. removing mustard and replacing it with either black oats (Avena spp.) on wetter properties, or turnips (Brassica campestris) on properties where

21 Restricted to a ‘proof of need required’ basis under the BIO-GRO standards. 22 See Section 4.2.3.

16 3.3.2 Managing weeds and pests later in the season. Some growers are experiment- One merit used to promote conversion to ing with additional strips of mustard which they organic sweet corn production is that it involves will harvest well after crop emergence. Given that few management changes: “Essentially it’s the no organophosphate pesticides (which do not same requirement of preparing a good seed bed discern between harmful and desired insects) are and if you do that the rest looks after itself” used on organic properties, organic growers stand (Interview 8). While some of the methods used to take greater advantage of a wasp parasite of differ between organic and conventional produc- GVB which has been present in New Zealand for tion a primary objective – a seed bed as free as many decades, but was recently re-released by possible from weed seedlings – remains the same. Crop and Food Research funded by VegFed and As stated previously, weeds were initially a major HWL. concern for growers, especially during wet sea- There are a range of pests that affect sweet sons (Interview 17). However, the solution to this corn for which biological control mechanisms are problem was relatively straightforward to imple- now available or in development. A parasite has ment. Growers merely “turned back the clock to been released for the Argentine stem weevil the ‘40s and ‘50s and borrowed our grandads’ (Listronotus bonariensis), while biological control methods of weed control” (Interview 7). Essen- mechanisms have recently been developed for tially, this involved a substitution of mechanical cosmopolitan armyworm (Pseudaletia separata) and for chemical weeding. After the green manure corn ear worm (Heliothis armigera conferta). Head crop is ploughed and then disced into the soil, the smut (Sphacelotheca reiliana) – a soil borne fungal ground is harrowed 2-3 times. Some growers disease – can only be prevented on organic prop- harrow even after plant emergence, but the impor- erties by crop rotation, but this is also the situation tation of specialised ‘spider-weeders’ has meant for conventional growers. One major challenge is that this relatively risky procedure has been greasy cutworm (Agrotis ipsilon) which is a com- curtailed. These machines utilise a rotating series mon pest for both organic and conventional of spoon-shaped tools which pull out weeds and properties. Currently, organic growers attempt to can be used until the sweet corn plants reach 15cm control cutworm using a restricted mix of garlic in height. The technology enables growers to and pyrethrum which appears to sicken rather cover over 50ha per day, so mitigates a consider- than kill the pest. Cutworm has caused significant able amount of the added labour time required for financial damage recently on both organic and organic production. Ultimately, however, organic conventional properties (Interviews 17, 18, 19, 20). sweet corn production retains the basic elements Investigations into better organic control mecha- of monoculture, so the continued development of nisms for this pest are currently in progress crop rotations around sweet corn production will (Interview 1). In the meantime, it is the most be a major factor in the long-term management of significant pest problem for organic sweet corn weeds and, indeed, in the maintenance of soil growers. fertility (Interview 2). This same requirement for crop rotation 3.3.3 Extension of organic sweet corn applies with even greater relevance to the man- methods to other crops agement of insect pests, which have provided Crop rotation is the best long-term solution for more problems for growers than weeds. There are both pests and weeds, so HWL was particularly several pests which attack sweet corn. The green interested in establishing secondary crops which vegetable bug (GVB, Nezara viridula) inserts its could be grown on organic sweet corn properties. stylet through the outer sheath of the cob and For its part, HWL has encouraged its growers to sucks the sugary liquid out of individual kernels. grow peas. Peas have a shorter, 80-90 day, growing As it is the same colour as the sheath, it is difficult period and an average crop removes fewer nutri- to detect and often the first sign that growers have ents from the soil than sweet corn, with the added a GVB problem is a high rejection rate at the time ability to fix nitrogen when soil conditions are of harvest. Until recently, there has been no favourable. They are a relatively easy crop to conventional solution to the GVB. Now, some grow, with few pest problems. A number of soil- conventional growers are managing the pest with borne fungi (eg. Fusarium oxysporum) affect peas chemicals, but the threat posed by GVB is ac- but, once again, they affect conventional and cepted as part of the long-term culture of sweet organic peas similarly and the best remedy is crop corn production in Gisborne. In fact, organic rotation. Similar weeding solutions to those growers have one distinct advantage over conven- developed for sweet corn can also be used on tional sweet corn producers. The mustard grown peas. Consequently, in recent years, the green primarily as a winter crop attracts the GVB more manure crop and mechanical weeding combina- than sweet corn and, with cutting and rolling of tion that was initially developed for sweet corn the mustard, the breeding cohort of the pest is has been extended to pea production. While the eradicated at just the right time to avoid problems production of organic peas in Gisborne is still in

17 its early stages, initial harvests suggest that 3.4 The relationship between organic peas may actually grow better in Gisborne than in Canterbury. Consequently, organic peas local and export organic have the potential to become a vital aspect of organic crop rotations for Gisborne. While it is industries technically feasible to grow a conventional pea The lack of any substantial domestic organic crop followed by sweet corn in one season industry in Gisborne has already been identified (thereby providing the growers with two lots of as a major factor influencing the way in which revenue), both BIO-GRO and HWL are in agree- organic production has developed in the region ment that this practice is not permissable for during the 1990s. This section will examine the organic producers (Interview 1). reasons why there was no domestic industry and Many of the organic sweet corn growers have the evolving relationship between export and seen that their newly developed methods could be domestic sectors. applied to squash production, which like sweet corn and peas, does not require major revision of its production system to become organic. As one 3.4.1 Accounting for the lack of a agronomist put it, squash “is virtually organic domestic organic industry in Gisborne anyway” and “few chemicals have been used on District squash in the past” (Interview 6). Nevertheless, soil fertility was a barrier for those attempting to There is a common assumption in literature produce organic squash. Both sweet corn growers about the organic industry – both of the academic and those who have grown squash for decades and popular varieties – that the export/commer- have been quick to adopt the use of green manure cial organic sector will have a pernicious effect on crops, as developed for sweet corn growers, for the domestic/philosophically-committed sector. squash production. Indeed, the same mix and Three stakeholders in the domestic organic indus- procedures for green manure crops tend to be try, all having an involvement from the mid 1970s, used. Before the adoption of methods used by were interviewed to evaluate this assumption. organic sweet corn producers, squash growers These informants (Interviews 12, 13, 14) recall that carried out a considerable amount of hand weed- nobody advertised produce as organic in the local ing. Although some hand weeding is still re- market before this time. As far as they were aware, quired, the suitability of spider weeders imported only four growers had attempted to grow organic for organic sweet corn have also helped to reduce produce in Gisborne for the local market in the the amount of labour time invested in squash. last 20 years. Some grow for the New Zealand Another method – disease infection period market, but cannot find a market for their produce forecasting – has been adapted specifically for within Gisborne District. At present, only one organic squash production. It is derived from family produces goods for consumption within analysis of weather conditions and helps growers Gisborne itself but, while their fruit is BIO-GRO predict fungal problems on squash. The most certified, most of their vegetables are labelled as detrimental of these is powdery mildew (usually ‘spray free’ (Interview 12, 13). Two health food cased by the organism Sphaerotheca fuliginea on shops occasionally sell organic fruit and vegeta- squash) which, increasingly, is treated with sul- bles, and then, mainly, to tourists or three regular phur both conventionally and organically because local customers (Interview 14). All of these factors in the 1990s it has developed a resistance to point to an inherent lack of realised demand for agrichemicals on some properties. The develop- the purchase of organic produce by Gisborne ment of organic squash has provided lessons for people. Further, it appears that this has been the all squash growers. No nitrogen is applied to situation for a lengthy period of time leading to organic squash in such rapid-impact forms as the relative lack of any domestic producers in the urea. Subsequently, it has been found that the district. absence of this form of nitrogen has led to longer Nevertheless, it is premature to suggest that shelf-storage times, and conventional methods because there is no realised demand for organic have been appropriately altered. One problem for produce that there is no latent demand. The three organic squash production has recently become stakeholders, as well as many other interviewees, evident. Japanese authorities have repeatedly highlighted four factors as explanations for the called for the fumigation of all squash entering current position: their country as a phytosanitary precaution. This would mean that organic squash could not carry • Growing conditions are so good in the area the BIO-GRO label into Japan. At present, how- that anyone interested in ‘healthy’ living will ever, systems are being put in place to circumvent grow organic vegetables for themselves; this and the outlook for organic squash growers is • There are many people in the area who are in reasonably favourable. low-income households, so many who are interested are too poor to pay a premium for

18 organic food and either go without, grow their Some organic produce which falls into this own or source them from the informal category has recently been sold in Gisborne economy through barter; supermarkets; • (Conversely) poor people are usually not • Produce grown for the export market, but not educated on the merits of organic food and meeting export requirements (‘rejects’), would cannot pay for it – a fact which, according to be sold on the local market. This, as well as some interviewees, was strongly related to the produce falling into the previous category, large number of Maori in Gisborne who were, would satisfy the problem of a lack of supply, supposedly, less interested in healthy food; which has frustrated many potential organic • Gisborne people were portrayed as conserva- customers in Gisborne and secure their long- tive: “It’s a rural area that loses its young and term custom; has lots of old families who have lived here a • Those conventional growers who had con- long time – a recipe for disaster if you’re trying verted to organic production for pragmatic to set up an organic industry” (Interview 14). reasons would themselves seek out organic food: partly out of interest, but also because of While the general demand for organic produce increased personal knowledge of the effects of throughout New Zealand is very low by world chemicals; standards (Saunders et al. 1997) – particularly as • The premium for organic produce that can be New Zealand consumers exhibit a strong belief in obtained in the domestic market is less than the ‘safety’ of conventional food in New Zealand – that in the export market and this restrains these four factors may explain why demand is large companies from selling organic goods lower in Gisborne than in most regions. There are locally. It also provides no incentive for such other factors, however, which point to a possible companies to interfere with, or out-compete, latent demand for an organic industry. People in individuals or cooperatives who would sell Gisborne have recently formed the Tairawhiti locally; organic producers and consumers group – partly • The involvement of large companies such as because it was felt that it might have gained a HWL as well as promotional campaigns such regional tour from the IFOAM conference at as GOWW have also brought a sense of legiti- Lincoln University during 1994, but also because it macy to organic consumers, leading others to was perceived that interest in organics was in- follow the now-fashionable lead of those creasing (Interview 13; Russell 1994). Interest in consumers. organic produce was said to notably increase after a 1995 campaign concerning the spraying of 2,4D It might also be argued that the involvement – a herbicide used to eradicate Californian thistle of large companies has helped solidify BIO-GRO (Cirsium arvense) and other weeds on pastoral NZ as the legitimate certifier of organic produce in farms (Interviews 12, 13, 14). Members of the New Zealand, helping acquaint New Zealand Tairawhiti organic producers and consumers group consumers with the idea of ‘third party certifica- were also prominent in the Gisborne chemical tion’. This may have overcome the long-standing awareness group which raised over 8000 signatures tendency for consumers to accept organic trading and succeeded in having aerial spraying of 2,4D ‘on trust’ and only within tight networks which prohibited under the District Plan (Scott 1995a,b; has excluded many potential consumers. How- Spense 1995). The chemical group highlighted the ever, the reasons listed above highlight that a success of organic exporters, as well as their limited supply is the fundamental concern for susceptibility to spray drift, as reasons to abandon those already consuming organic produce in conventional sprays and subsequently elevated Gisborne District. Any move that might increase the knowledge of, and interest in, organics in the the consistency of supply or the diversity of area. available goods is perceived positively by such people. Some northern hemisphere researchers are 3.4.2 Effect of exports on the local concerned that large companies may, through their superior marketing and economies of scale, organic industry force small/local producers out of business but, in However, the important fact is that this in- the Gisborne case, few such producers exist. crease in the potential demand and interest in Therefore, the immediate effect of a growing organics occurred well after the establishment of export organic industry is a positive influence on the export organic industry. Indeed, interviewees its local equivalent. point out that the growing export industry is likely to foster growth in its domestic equivalent. Several reasons for this view were given:

• Some of the export growers could be convinced to sell organic produce in the local market.

19 Chapter 4 agenda; others have directly competed with HWL Emerging issues for growers and the supply of produce. 4.1.1 Synergies between companies in y the 1995/96 season a degree of stability had formed in Gisborne’s export organic organic production Bindustry. HWL had found reliable sources Gisborne is one of the largest export regions of both demand and supply and, while the latter for squash in New Zealand. However, because remained considerably smaller than the former, squash are simply packaged in boxes prior to there was a momentum of grower conversions export, most of the companies that export squash which seemed irreversible. Many technical barri- from Gisborne District do not have significant ers had largely been overcome and those farmers plant or offices locally in the region. Under the who had initiated the process of conversion in the 1987 Horticultural Export Authority Act, the New early 1990s had increasing areas of fully certified Zealand Buttercup Squash Council was given the land. Extension of organic methods from sweet- “authority to enforce conformity to an approved corn to other crops had begun and growers who marketing plan amongst growers, packers and had initially started with sweet corn had diversi- exporters of squash” (Perry et al. 1997:293). How- fied into peas and squash. This diversification, ever, this authority does not give the Council an however, has been accompanied by potential export monopoly, and squash exporting compa- instabilities in the structure of Gisborne’s export nies have a relatively high degree of freedom. organic sector and these as well as other emergent Generally, companies involved in the exporting of issues are the foci of this chapter. While the out- organic squash tend not to compete with compa- look for organics is undoubtedly more favourable nies that export organic sweet corn. Five compa- than it is for Gisborne’s conventional sector, there nies have become involved in the exporting of is some evidence presented below which indicates organic squash from Gisborne: S.C. Murphy Co., that it may not be immune to many of the prob- Fresh Co., Strongmore Exports, Cox Co. Ltd and lems typical of conventional food production Sunrise Coast NZ. Only Sunrise Coast and Cox systems. Co. have an office/packhouse in Gisborne itself. The other companies all use local agronomists and 4.1 Complementary and agents to obtain contracts from local growers. S.C. Murphy – the company that exports the most competing firms: the impact of an organic squash from Gisborne – uses Agriculture NZ for crop procurement and monitoring. In increasing range of companies 1996/97, it exported 200t of organic squash grown in Gisborne, almost all of which was sent to a involved in organic exporting cooperative supermarket in Japan (Interview 4). It The first set of issues concerns the nature of also exported organic squash from the Bay of inter-firm competition in Gisborne’s export Plenty, Manawatu, Hawke’s Bay, and Canterbury organic industry. Although HWL dominated regions. All of the companies that export organic proceedings from 1992 to 1995, firms that also squash from Gisborne source product from more established organic production around 1992 have than one area (Interview 6). expanded that production in recent years and a The price premium for organic squash is number of other firms have entered the industry shown in Table 4.1 and is higher than that for since that time, further diversifying the array of organic sweet corn (see Table 3.1). However, with organic foods available for export. Some of these additional costs in terms of hand weeding and a firms have proven complementary to HWL’s less reliable yield, the gross-margin premiums for squash and sweet corn are in a similar range. Regime Price per tonnePrice premium Gross margin Gross margin Like HWL, the five over per tonne premium over companies involved conventional conventional show a marked ten- dency to source squash from long-established Conventional 330 – 255 – growers who convert to organic production Organic 680 106% 350 37% (Interview 6), but they also show a desire to Table 4.1: Average price paid (in $NZ) and gross margins for squash, Gisborne contract produce from District, 1996/97. (Data supplied in Interview 7 and relates to a study of the organic sweet corn prices paid by the three largest exporters of organic squash which source pro- growers who seek a duce in Gisborne District.) rotation using squash.

20 These growers have achieved comparable yields the long-term viability of its organic strategy. Only to established organic squash growers (Interviews Organic has utilised the pool of growers devel- 4, 7). oped by HWL Christchurch and has created new According to the export managers and agrono- crop options for those growers to incorporate. This mists interviewed, HWL and squash-exporting stabilises the supply base for HWL’s key crops by companies have cooperated in determining the providing growers with a more secure outlook medium-term organic strategy for Gisborne and the ability to rotate crops, a situation which is District (Interviews 1-8). A mutual understanding also beneficial for Only Organic. That company has developed wherein it is accepted that the ideal also purchases a small amount of HWL rejects property will have roughly equal areas in organic which have failed visual quality criteria for sweet corn, peas and squash. This cooperation exporting, but can be successfully processed into reflects the fact that sweet corn and squash pro- baby food (Interview 1). While these kinds of duction are mutually compatible. The advent of synergies are characteristic of the other case organic squash exporting has helped HWL over- studies, Gisborne provides one example of direct come rotational problems with its growers. It has competition between organic exporting compa- also helped HWL attract growers who are worried nies. For the coming season, competition over about supplying only one processor or packer. land certified for organic sweet corn will be part of Growers who are fearful that HWL Gisborne may the local dynamic in Gisborne’s organic industry, close are less concerned about entering organic due largely to one company’s desire to further production given that they will have more than diversify its strategy for organic production. one crop to grow and more than one buyer for Sunrise Coast is a Gisborne business which their harvest. Even though the pool of BIO-GRO formed in 1982 to sell oranges within the domestic certified land is small, HWL and squash exporters market, but it has since emerged as an important do not always compete for the same plots of exporter of a number of horticultural products. In land23. As one grower states, “After you’ve grown 1986, it started to export squash and five years sweet corn for two or three years on the same later it exported its first consignment of organic paddock, its either squash or fallow so with those squash grown in Gisborne. In other seasons, the options we’ll always have at least 20-30% of the company has also exported organic potatoes and property available for squash” (Interview 18). carrots which were sourced from other parts of the While the move to organic pea production for country. By 1997, 90% of Sunrise’s activities were HWL has increased these options, a number of in the export market (Interview 6) and it has growers commented that HWL agronomists still created a secure niche as a counter-seasonal recommend that they grow squash for another exporter. Its strategy has been to develop a system company (Interviews 18, 20, 21). of contract horticulture, which incorporates some of the logic of the ‘just-in-time’ approach, so as to 4.1.2 Competition between companies in reduce the time between orders being placed in Japan and the fulfilment of those orders by grow- organic production ers in New Zealand (Interview 3). The company These types of synergies also developed in the has committed itself to flexibility, especially in other two case study areas, but perhaps this terms of discovering new market niches then reflects the fact that few organic exporters in either contracting appropriate growers to produce for Canterbury or Bay of Plenty are in direct competi- those niches on an annual basis. A significant tion with each other for established growers. In proportion of the food supplied to Sunrise Coast is Bay of Plenty, for example, the organic industry is grown on leased land: a flexible form of tenure dominated by Zespri International Ltd. which, as which reflects the company’s emphases on flex- it has a monopoly, experiences no local competi- ibility and responsiveness to changes in consumer tion from kiwifruit exporters. In Canterbury, a demand. Part of this strategy is to dovetail with number of synergies developed, as is especially the system of direct sourcing favoured by its Asian evident in the relationship between HWL clientele. For this reason, the company gives its Christchurch and Only Organic NZ Ltd. HWL clientele as much say as possible over the nature regards the difficulty in constructing a full organic of the product and the way it is grown, and rotation for its growers as a significant barrier to Sunrise Coast imports Japanese seedstock so their

23 Some squash growers have employed MAF Quality Management field officers to act as quality control agents for the organic standards which the Codex Alimentarius Commission is presently finalising for organic production. The commission is a part of both the World Health Organisation and the Food and Agriculture Organisation and is an auditing and standard setting body which aims to harmonise inter-governmental standards for trade. The inter-governmental debate on the Codex organic standards is currently deadlocked. However, with the significant role given to the Commission by the Uruguay Road Agricul- tural Agreement and especially the World Trade Organisation Agreement on Technical Barriers to Trade (see Campbell and Coombes forthcoming), its standards are likely to become increasingly important for the global trade in organic products. Al- though they are slightly less stringent than BIO-GRO NZ’s organic criteria which follow closely IFOAM standards, it is believed that a gross-margin premium which is close to that for BIO-GRO certified squash can be obtained by organic growers producing squash under the draft Codex standards.

21 produce more accurately reflects Japanese food that HWL experienced in 1992 in terms of convinc- tastes. ing conventional growers to convert, but has one This system has led the company to have a option that HWL did not have when it started its greater interest in organic products, which they organic sweet corn operation: to attract growers export to Japanese cooperative supermarket already established in organics. Sunrise Coast are chains. Sunrise Coast’s interest in cropping in- relatively open about this being part of their creased and diversified through the marketing strategy to increase their pool of organic suppliers and exporting of processed corn powders for (Interview 3), but also argue that their long-term Cedenco in the early 1990s. Later in the decade, strategy for increasing the number of contracted Sunrise sought to further develop its own process- sweet corn growers who are BIO-GRO certified is ing facilities and invested considerable assets in to convert their existing conventional growers. developing a process for retort pouche packaging While HWL will not perceive the latter strategy of carrots and sweet corn. Retort pouche products negatively, the company believes that the former have an outwardly similar appearance to vacuum strategy is largely unfair, with companies “free- packed foods. However, the significant difference riding” on HWL’s investment in research and the is that they are cooked in their flexible plastic GOWW campaign (Interview 1). One HWL packaging, with equal pressure applied inside and agronomist argues that “Sunrise aren’t assisting outside, resulting in a shelf-stable form that growers to convert with a technology transfer remains fresh for twelve months. Although the program and they aren’t putting anything back process yields relatively expensive and individu- into the industry” (Interview 8). ally-wrapped corn cobs, Sunrise Coast has ex- In contrast to this, Sunrise Coast claims that its ported over eight million pouched cobs in the last strategy reflects “ordinary competition in the food two years (Interview 3). There are a number of industry” because it is “doing little more than difficulties involved in the process. First, pouching offering growers a better contract”24 (Interview 3). has to occur within twelve hours of harvest, Because the pouching of sweet corn demands that leading to a special need for coordination of there are no visual blemishes – whereas the growers, harvesters and the processor. Second, criteria for processed sweet corn are more tolerant because the product is sold as a whole cob in of cosmetic variation – it is also true that the transparent packages, crop quality has to be high requisite skills for growing for each process are and there is a relatively high rejection rate (Inter- different enough for some growers to specialise in view 6). Whereas HWL break down cobs into one but not the other. Nevertheless, the initial kernels and can therefore manage cobs with reactions of sweet corn growers who are already several GVB-spoiled kernels, Sunrise Coast reject certified suggest that most new and established cobs that have more than two such kernels. A growers will sign contracts with both companies second factor is that Sunrise Coast uses bi-col- and it remains to be seen what the outcomes of oured supersweet varieties which reduces the this situation will be. Furthermore, it is necessary possibility of developing synergies with HWL. to remember that sweet corn is just one of a Because HWL’s markets demand uniformly number of BIO-GRO (and SunGreen25) organic yellow kernels, there is no potential for HWL to products that Sunrise exports. More significantly, purchase rejects from Sunrise Coast to use in however, the company also counters the claim that processed products. they are not providing a technology transfer The pouching process has recently been program. While little of Sunrise’s R&D expendi- registered with BIO-GRO NZ, and Sunrise Coast ture is targeted directly to BIO-GRO organic actively courted organic growers during the production, growers producing under the BIO- spring of 1997 (Interviews 17, 18, 20). Therein lies GRO label will undoubtedly benefit from research the potential for competition in Gisborne’s organic funded by Sunrise for its SunGreen project. For industry. In the 1998/99 season, Sunrise Coast’s that project, Sunrise has established research organic operation is set to increase, and it is farms and has evaluated varieties and techniques already the second largest organic exporter in the to grow crops without chemical fertilisers. This is Gisborne area. But it is less the size of the compa- significant because, as is shown later in this ny’s organic plans than its desire to obtain organic Chapter, organic growers now perceive soil sweet corn growers that will engender this compe- fertility to be the most substantial threat to the tition. The company faces the same difficulties long-term sustainability of organic sweet corn

24 In reality, Sunrise offers a similar price for organic sweetcorn to that of HWL. However, some of the sweetcorn growers who were interviewed believed that Sunrise’s pouched sweetcorn was a better advertisement for organics than HWL’s frozen sweetcorn because it emphasises some of the reported marketing advantages of organic food, especially its brighter colour and “fresh” image. Even if HWL and Sunrise offer the same price for organic sweetcorn, growers commented that they would offer some of the their produce to Sunrise because “we’d like to help grow Sunrise’s organic effort as more organic sweetcorn buyers means more security” (Interview 17). 25 See Section 4.1.3.

22 production. ers and processors which has, thus far, proved to The issue of technology transfer vis-à-vis be a requisite for the successful development of competition for organic suppliers is very impor- export/commercial organic production. tant in terms of the future for organic production in New Zealand. The competition for certified 4.1.3 SunGreen: towards alternative growers has many similarities to the perennial problems of other highly competitive systems for certification systems for organic horticultural commodities, but organic supply is production unique in one important respect: its basis in highly One of Sunrise Coast’s more recently formu- skilled production which takes some time to learn lated strategies for organic production may prove and establish. Consequently, issues of skill devel- more controversial. For several years, the com- opment may become increasingly salient in the pany has experimented with low-input produc- future evolution of organic production in tion regimes, certifying squash under the Codex Gisborne. As competition for supply and certified system and using low-residue produce to dovetail land increases, companies might consider it to be with the ‘green’ labels of the Japanese supermar- no longer prudent to engage in technology trans- kets that it supplies. However, its managers fer without some more formal control over pro- believe that a highly marketable product is one duction26. Alternatively, the local industry might that lies between the low-input/IPM approach begin to reproduce the pattern in Canterbury and the essentialist stance adopted by BIO-GRO where grower networks are a major locus of skill NZ on organic criteria. While the company is development (see Liepins and Campbell 1997), but expected to further increase the amount of BIO- so far there is little evidence that this will be the GRO certified squash and sweet corn that it case. exports from Gisborne, it has also established its Whatever the outcome, the introduction of own certification system for “organic” food – the competition between Sunrise Coast and HWL for SunGreen label – and has invested considerable the procurement of organic sweet corn raises resources in its development. 1997/98 was the first important issues for the future. The immediate season in which the label was used, with impact of the two companies’ activities in SunGreen squash and sweet corn being exported Gisborne is that growers have more choice and to Japan. SunGreen is both a stand-alone organic possibly a better bargaining position. However, label and a scheme which certifies produce that this comes at the cost of a slightly reduced level of can be absorbed within the green labels of super- trust and cooperation between the growers and markets in Japan. There are a number of similari- the purchasers of their product. While increased ties and differences among the criteria for competition for supply will impact on the proces- SunGreen and BIO-GRO organic production: sors/exporters (as was negatively instanced by the impact of Cedenco on other horticultural proces- • Both BIO-GRO NZ and SunGreen insist that no sors) it is not known whether HWL are able to chemical fertilisers, fungicides, insecticides or increase the price for organic sweet corn in over- herbicides are used on crops. Thus, both sets of seas markets to offset higher payouts to their criteria include a list of naturally occurring growers. While competition for supply has impor- substances which can be used as substitutes for tant implications, should Sunrise Coast, or other manufactured chemicals (eg. garlic and pyre- firms, start competing in the same destination thrum mix as a substitute for a conventional markets with the same products, the implications pesticide). This list forms part of a written code would be much more serious. Even without any for organic production which Sunrise Coast, direct competition in destination markets, how- like BIO-GRO NZ, distributes to contributing ever, the competition for organic growers has the growers. potential to cause instabilities in the structure of • Whereas BIO-GRO NZ uses its own inspectors the Gisborne industry. It may substitute mistrust to audit growers, Sunrise Coast uses inspectors for the close working relationship between grow- from MAF Quality Management (MAFQual)27

26 A solution for organic processing companies could potentially be found in lease arrangements. In some forms, leasing may remove the potential for “leakage” from significant investments in human resources. Some companies may prefer to lease land and have their own employees grow crops. Employees trained in organic production by their company are less likely to migrate to other companies than annually-contracted growers/ independent land owners who benefit from the technology transfer programs of one company and then sign contracts with another on the basis of higher prices. See also Sections 3.3.2 and 4.4.2 27 MAFQual is a state owned enterprise formed out of the pre-existing inspection services provided by the Ministry of Agriculture and Fisheries (MAF). MAFQual earns revenue by providing ‘quality’ management and inspection services. While there is still a tenuous relationship between MAFQual (a state-owned enterprise) and the remaining divisions of MAF (a government ministry), this will cease in the near future with the full privatisa- tion of MAFQual.

23 as a third-party auditor for SunGreen. The • The use of MAFQual to underwrite the pro- auditing process includes visits to the proper- gram is revealing. The Japanese importation ties of growers in the scheme, contributing bureaucracy is wary of any label which is not packhouses and Sunrise Coast itself. It also supported by an exporting government’s includes checks of the necessary documenta- agricultural ministry28. Therefore, “Because tion and chemical residue testing in order for BIO-GRO isn’t government supported there is MAFQual to verify that the crop meets the only a limited opportunity to market its label criteria set for the SunGreen program. on our produce in Japan. People over there • BIO-GRO NZ certifies growers not only on the would like to see ‘MAF’ stamped on their basis of their land and produce but also on the organic food – but they don’t” (Interview 3). basis of their commitment to organics. Conse- • A considerable advantage of the SunGreen quently, growers have to convince BIO-GRO label for Sunrise Coast is that its growers inspectors that they intend to eventually certify would not have to go through a 2-3 year all of their property. Conversely, the SunGreen conversion, as is the case under BIO-GRO NZ. system is a seasonal certification of a grower’s Rather, contracts could be made which reflect crop, rather than a label which requires a long- the company’s desire for flexibility and ‘or- term commitment to organics. ganic’ output could be more easily increased or • The main difference between the two systems decreased to meet market demands on an is that, whereas BIO-GRO NZ insists on a 2-3 annual basis. Likewise, as so much of the year transition/conversion period between produce exported by Sunrise Coast is grown on conventional production and full registration, leasehold land, there was need for a greater there is no such transition period for SunGreen. degree of flexibility than is evident in BIO- When a grower either loses certification or GRO’s criteria for certification29. decides to pull out of BIO-GRO, they will be • In Section 4.2.4, it will be shown that a number forced to endure another transition period for a of BIO-GRO organic sweet corn growers are subsequent re-certification. Because SunGreen concerned about the sustainability of their is a seasonal certification system, growers operations. Initially, the prospect for weed and would be allowed to apply a conventional pest infestation formed the most significant fertiliser in order to restore soil fertility after perceptual obstacles for the conversion of harvesting of the main crop. Furthermore, conventional growers. More recently, the growers are given a considerably greater level potential for declining soil fertility on organic of flexibility to decide which of their paddocks sweet corn and squash properties has worried will be used for SunGreen or conventional growers who are close to converting. The production. Thus, a typical supplier to the ability to apply conventional fertilisers over SunGreen label may annually rotate paddocks winter months and to alternate yearly between from SunGreen to conventional production in SunGreen and conventional production may be order to maintain soil fertility and crop yields. highly appealing to growers wary of BIO- GRO’s more strict requirements. While only six Sunrise Coast’s desire for a range of organic Gisborne growers were contracted for the labels reflects a number of forces which are moti- SunGreen program for 1997/98, this represents vating the company: a more promising start than HWL’s first year of their plan to convert conventional sweet corn • Supposedly, there are “degrees of organic” in growers to BIO-GRO production. Japan – 100%, 70% and 50% organic thresholds with which consumers are familiar (Interview Several aspects of Sunrise Coast’s plans will 6). In turn, these thresholds are said to reflect concern other stakeholders in the organics indus- the expressed food tastes of contemporary try. The SunGreen label is only one of a number of Japanese consumers which are influenced less recent approaches which companies have used to by a broad environmental philosophy and sell produce as “organically grown” in the Japa- more by food safety issues (Interview 3). This nese market but without BIO-GRO certification. means that there is the potential to market an Some companies have taken advantage of the array of “organic” lines, and produce grown relatively loose definition of organics in Japan by under the SunGreen criteria will be sold in selling Codex certified squash to supermarkets Japan as “organically grown”. BIO-GRO which then claim it to be organic. Given that the organic produce is believed to satisfy only one Japanese government is planning to develop a segment of the Japanese ‘organic’ market. national standard for the use of the term ‘organic’

28 BIO-GRO certified produce has only been allowed access to Japan because of the organisation’s established links with IFOAM and because it has been known in Japan for several years. Nevertheless, continued access to the Japanese market in the absence of governmental backing is periodically questioned by Japanese importing officials. 29 See Section 4.4.2.

24 – partly in response to pressure from consumers’ tional growers have more easily taken the step groups and cooperatives who are concerned about across the ideological divide between conven- the looseness of the use of organic labels – this tional and organic production. If a new range of strategy might be a better reflection of the current organic labels undermines the legitimacy of BIO- state of the Japanese market rather than its future GRO NZ in the view of New Zealand farmers, form. Nevertheless, it is unlikely that the Japanese uncertainty may again prevail and the momentum government will adopt an essentialist definition of grower conversions may diminish. It may also for organic production, so food produced under be true that many conventional growers will the SunGreen label may still pass through Japa- welcome “looser” organic standard and would nese food and border regulations. Although food gratefully convert to schemes similar to the grown under Sunrise Coast’s eco-label would fall SunGreen example. This would also imply that the well short of the strict requirements of BIO-GRO momentum of conversions to BIO-GRO NZ will NZ, it may, therefore, be considered a legitimate be reduced, yet it has a worthy claim to being the organic product in Japan. Sunrise Coast both most “legitimate” of potential certifiers for organic admitted and desired that SunGreen would be food. more flexible than BIO-GRO’s standards. Second, access for organic products to the One of New Zealand’s larger frozen vegetable Japanese market is, and always has been, tenta- processing companies also attempted to create its tive. This is no better exemplified than by the own organic label for the 1997/98 season. Because removal of access for Chilean organic kiwifruit BIO-GRO and the Organic Products Exporters growers to Japanese consumers in 1995. Testing of Group30 are presently petitioning the Minister of certified organic Chilean kiwifruit revealed fruit Agriculture about this case, few details can be with chemical residues. Consequently, all Chilean disclosed. However, because of restructuring organic kiwifruit was banned for two seasons within MAF over recent years – which has de- until the integrity of organic certification and creased the Ministry’s regulatory powers and labelling was re-established. There is considerable increased its role as a facilitator of ‘market ori- potential for a competing range of New Zealand ented’ agriculture – there is some doubt as to organic labels to bring about conflict which may whether it will attempt to limit the proliferation of also lead to the removal of access for New Zea- organic labels. Indeed, the fact that MAFQual has land’s organic producers to Japan. This potential is legitimised SunGreen in the view of Japanese particularly apparent in the case of “seasonal” consumers by auditing the label shows that one labels, under which there is a possibility for possible direction for MAF is already apparent. If residues in the soil from previous applications of MAFQual agents continue to underwrite alterna- agrichemicals to contaminate food, even if no tive certification schemes with the blessing of agrichemicals are applied directly to the crop. MAF RA, the Ministry may become a force which Although Sunrise Coast will, through MAFQual, not only allows the proliferation of organic labels, utilise testing for residues to mitigate this poten- but actively encourages it. tial, this direction involves far more risks than the One difficulty with such a stance is that the alternative practice of 2-3 year transitions em- range of organic labels in Japan may confuse ployed under BIO-GRO NZ. consumer groups. Interestingly, when asked if In many respects, companies like Sunrise their plans might cause confusion in the Japanese Coast are not at fault for their desire to form market over the ‘legitimacy’ of individual labels, alternative labels. The main source for confusion managers from Sunrise Coast replied that, “As lies with MAF. The lack of security for access to exporting is a system of relationships between the Japanese market has been brought about executives, you don’t necessarily have to be BIO- partly because that Ministry has not publicly GRO certified to be known as organic – you just sanctioned one particular certification scheme. have to be trusted” (Interview 3). The company There have been several efforts to enlist MAF to also claims that the differing perceptions of underwrite the BIO-GRO label, but the Ministry ‘organics’ in Japan will absorb a number of alter- finds itself in an ideological context wherein any native organic labels, each with a different inter- intervention in the market is not a popular direc- pretation of organic production in its certification tion. The Ministry’s new emphasis on a profit- criteria. It remains to be seen whether these oriented consultancy service has also limited the interpretations are ultimately valid. possibility of it legitimising BIO-GRO NZ. At There are two other difficulties with the present, MAF will not support BIO-GRO NZ proliferation of organic labels which are poten- unless it receives a financial reward but organic tially more serious. First, the solidification of BIO- growers already complain about the level of GRO NZ as the main certifying agency in New certification fees and these would have to rise if Zealand has been a context within which conven- MAF insists on such financial rewards. Yet, Japa-

30 A group set up to foster the exportation of organic food. The OPEG is partly funded by industry and partly supported by government as a Tradenz Joint Action Group (JAG).

25 ganic market. Cost item* Conventional Organic These concerns apply mostly to sweet corn growers and, as that Cultivation 508 740 group represent the significant Seed and Planting 232 218 proportion of growers, these issues are examined in detail. Fertiliser 238 484 However, all such issues have relevance for the other organic Weed Control 164 80 sectors in Gisborne District. Pest and Disease Control 43 176 4.2.1 Contractors, inputs Other 0 36 and costs TOTAL 1185 1734 The first concern was raised by several growers and involves the Table 4.2: Typical Costs per ha (in $NZ): Organic vs Conventional cost of organic inputs. In theory, Sweetcorn Production (Sources: HWL Gisborne Gross Margin Re- the premium offered by HWL is port on 1997 Crop; Interviews 1, 8, 18). *Where appropriate, these calculated in a way which com- include labour time at standard rates per hour. pensates the average organic grower for increased input costs. nese consumers would be less wary of organic Thus, growers are largely buffered from the produce grown in New Zealand if the New increased cost of organic inputs. Yet, as one Zealand government legitimised a national stand- grower comments: “Why should growers put up ard. In the view of this report’s authors, industry, with input prices that are higher than they should governmental and academic support should be be. Sure the grower gets a premium but the largest targeted to BIO-GRO NZ. The independence of premiums seem to go to suppliers of organic that organisation from market or political interfer- pesticides and fertilisers” (Interview 22). Given ence and its strong links with IFOAM render its that organic growers evaluate all costs in relation legitimacy with international consumers relatively to conventional production a comparison is made unquestionable. Such legitimacy will become of the two cost regimes in Table 4.2. increasingly important if the international trade in As is indicated in Table 4.2, total costs per organic food is to continue. hectare are, on average, higher and amount to a 40% greater cost for organic compared to conven- tional production. Such averages, however, mask 4.2 Grower concerns relating to some of the specific input problems experienced Gisborne’s organic industry by growers. The most frequent complaint related to the price of fish fertiliser which is relatively In many respects, sweet corn growers wel- expensive, but at least one grower claimed that it come the competition between HWL and Sunrise had: “Almost no noticeable effect compared to Coast, believing that it may increase organic urea, so isn’t worth the money” (Interview 17). premiums. However, growers have several other The garlic and pyrethrum mix used as an organic concerns about the direction that the industry is pesticide provides the largest single input cost. taking and these relate to: The average application is 8l/ha with two sprays per season and current prices of $320 for a 20l • Opportunity costs of organic production as drum. This compares with the much lower appli- well as the costs of organic inputs and, given cation rate and lower price of a typical conven- their limited availability, contractors specialis- tional pesticide, though on a conventional prop- ing in organic methods; erty as many as four spray applications occur in a • Falling returns brought about by reductions in season. However, the main cost problem of or- the organic premium, and the variability of ganic pesticides and fertilisers relates to escalating organic yields; costs in poor seasons. All the organic sweet corn • Long-term issues concerning whole property growers interviewed noted that, while conven- conversion and whether or not they should tional properties have to apply little extra fertiliser abandon one year’s returns in favour of a or chemicals in a cold/wet season some organic fallow; growers feel they have to double their applica- • The extent to which organic growers can tions31. influence processors/marketers and the or- Increasingly, as some sweet corn growers

31 It may well be obvious that there is need for extra fertiliser applications when plant growth is stunted by poor growing conditions. However, in cold weather, plants remain at a growth stage where they are more suscepti- ble to attack from pests for a longer period of time, requiring extra organic pesticides.

26 convert a higher percentage of their property, hectare do not increase disproportionately for the there is a need for specialist machinery for organic organic properties during a bad season32, the production. Three growers have already bought reduction in profit is larger for the organic pro- inter-row weeders costing over $10,000 each and a ducer. This is because costs are (at best) fixed at a similar price is paid for spider-weeders. Some constant rate per annum and for organic growers have found their tractors unsuitable and have they are fixed at a higher rate (Table 4.2). So, in a replaced them with specialised or newer models, year with reduced yields, costs are a dispropor- and others complained of apparent duplication of tionately higher percentage of total revenue on equipment, especially the need for separate spray organic properties. gear to apply conventional and organic mixes on The notion of the ‘average year’ also plays a different parts of their property. A small number part in growers’ evaluations of their progress of contractors specialising in organic methods under an organic regime and this has at times have become established in Gisborne District. become a contentious issue. While some growers Such contractors – especially those that apply have been able to obtain close to or above the organic pesticides – usually have to be BIO-GRO average of 14t/ha for organic sweet corn, one certified and given that few have gone through grower’s yields have decreased each year to the the process, those that have charge high hourly point where he had a yield last year of only 6t/ha rates. It may well be that as more growers enter and he will abandon organic sweet corn for 1997/ organic production the cost of contractors and 98 (Interview 22). Yet another problem in poor specialised inputs and machinery will reduce. At seasons is a higher rejection level at harvest, even present, however, growers believe that the return though HWL rejects few cobs (Interview 17). The on their investments is relatively poor. more crucial discussion of expected yields occurs Most growers agreed that labour time effec- when HWL agronomists meet on a face-to-face tively doubled, largely because of extra cultivation basis with growers. Nevertheless, ‘average’ data and mechanical weeding. Again, this was particu- for organic versus conventional production – larly the case in bad growing seasons, when which is now published in the form of a five- growers not only had to weed more often but had yearly cumulative mean because the HWL sweet to spend a considerable amount of time monitor- corn operation has lasted for long enough for a ing their crops for pests. While the organic pre- suitable collection of data – has been reported mium appears to make up for these costs in the twice by HWL in GOWW newsletters. In both longer-term, growers repeatedly highlighted the cases, however, the data were for single seasons extra costs in both labour and inputs that occur in and evaluated a relatively abundant harvest. bad years as being difficult to manage. They also Growers contend that there are two issues of point to increased stress levels, which are caused concern: by a greater degree of uncertainty, that are not necessarily experienced by conventional growers. • The variability among organic sweet corn There are also problems with opportunity costs. growers is more marked than is the case for Some growers believe that they are not adequately conventional production; compensated in the organic price structure for • Inter-seasonal variability is greater for organic their inability to graze stock over winter. One production. grower will leave the industry this year, partly because he is able to obtain $500/ha for winter The first issue probably relates to the fact that grazing if he abandons organic production (Inter- soil fertility is much more important as a deter- view 22). mining factor in sweet corn yields than it is for other organic crops. Under a conventional regime, 4.2.2 Variability of yield and reductions in urea and other artificial fertilisers can level-out the differing skill levels among growers and the premium differing levels of natural fertility on individual Of course, in a bad year conventional produc- properties, reducing variability so that conven- tion also declines and growers who produced both tional sweet corn properties tend more closely conventional and organic sweet corn pointed out towards the average of 18t/ha. Because the that yields decreased by about the same amount smoothing function of artificial fertilisers cannot (Interviews 17, 20). Some were surprised that this be used on organic sweet corn properties, and had been the case and had expected organic yields because organic fertilising systems take both time in a bad season to reduce by a considerably higher to establish and skill to perfect, there is a much proportion vis-à-vis conventional yields. However, greater potential for variability from the mean, even if yields for organic and conventional grow- especially at such an early stage of HWL’s organic ers reduce by equivalent proportions and costs per sweet corn operation.

32 As has already been suggested, there is some evidence that organic costs do increase relative to conventional costs in a bad season.

27 Conventional Jubilee Organic Jubilee

Average Expected Average Expected 1992/93-1995/96 Average 1992/93-1995/96 Average 1996/97+ 1996/97+

Yield (t/ha) 18 18 14 14

Price ($) per t 140 115 255 210

Change in price per t -18% — -18%

Income ($) per ha 2520 2070 3570 2940

Costs* ($) per ha 1190 1190 1735 1735

GM ($) per ha 1330 880 1835 1205

Change in GM per ha -34% — -34%

GM premium per ha over conventional 38% 37%

Table 4.3: Gross Margin (GM) Analysis of HWL Sweetcorn: Organic Production vs Conven- tional Production and 1996/97 Price Reductions. (Sources: HWL Gisborne Gross Margin Re- port on 1997 Crop.; adjusted for longer-term conditions with information from Interviews 1, 8, 18, 20, 22) * See Table 4.2

This problem is further accentuated by the fact conventional growers who fail to produce average that the sample of organic sweet corn growers is yields, the remedies for organic growers require a small and, with two of the largest Gisborne much longer-term development of management properties also being highly productive compared techniques and skills rather than the short-term to the rest, the resultant mean may be skewed contingency of increased inputs common to towards the maximum. In time, with the solidifi- conventional production. Consequently, the issue cation of systems for organic fertilisers and with of ‘average’ production levels has become a source growth in the number of suppliers, the problem of of frustration for some organic growers. ‘averages’ may reduce, but it is likely that there In most respects, growers make decisions on will always be a greater degree of variability the basis of gross-margin analysis, rather than among organic growers as compared to the case only on price information and simple averages. A for conventional growers. The conventional mean gross margin (per hectare) analysis of organic does not mask variability among conventional against conventional production is presented in producers to the same extent that the organic Table 4.3. The table shows that despite changes in mean obfuscates variability among organic pro- 1996/97, there is still a significantly higher gross ducers. Because this logic is not particularly clear margin for organic sweet corn production com- to growers, an ex-conventional grower who has pared to that for conventional production. With a for a long time produced under conventional gross margin per hectare premium of 38% in the conditions will expect to come close to the mean period 1992/93 to 1995/96, organic growers with for organic production after conversion, but this is relatively poor land could afford to grow at under not assured. Now that HWL has moved to a mean the 14t/ha average yield. created on the past five seasons of data, inter- However, the single most significant com- seasonal variation will be better accounted for in plaint from growers relates to the reduction in the data that it publishes. Furthermore, some of prices for organic sweet corn for the 1996/97 the concern about inter-seasonal variation can be season and the effects of that reduction are also accounted for by the fact that the season immedi- evaluated in Table 4.3. For that season, HWL ately prior to interviewing was particularly cold reduced its organic price per tonne by 18% to and wet. $210/ha, but it also reduced its conventional price Nevertheless, some growers have claimed that by the same percentage. While many growers the averages which were initially published and recognised that currency movements had ad- discussed by HWL agronomists have been the versely affected market prices, what most con- basis on which they converted. Consequently, cerned them was that both organic and conven- when some growers failed to reach an expected tional prices decreased by the same amount. The average, they begin to question their continued key difference between conventional and organic participation in organic production. While the sweet corn was that world demand for conven- same problem of ‘averages’ probably exists for tional sweet corn was declining relative to organic,

28 yet both prices were reduced for growers. While because of the degree of technical and, occasion- the price setting process in a large corporation is ally, financial assistance given in earlier years – complex and opaque, there were two identifiable but, because of the price reductions, would accept factors behind this decision to link the prices. offers from Sunrise Coast (Interviews 17, 18, 20). First, organic and conventional sweet corn are Growers also point to other factors to justify their often linked in HWL’s marketing strategies for reduced loyalty to HWL. Several stated that the Japan, making a price slump in one influential on level of technical assistance from the company the pricing of the other33. Second, the primary was once exemplary but has since reduced to what difficulty influencing HWL revenue was not only they consider unsatisfactory levels. Many repeated changing demand but fluctuations in the New the notion that “Watties only offered us a high Zealand dollar. The latter declined dramatically level of support at the start to get us hooked into relative to the yen in 1996/97, leaving HWL with organics…Since getting us hooked we haven’t two options: either increase prices in destination been helped at all” (Interview 18). This concern is markets (which they believed would compromise perhaps acting as an outlet for other deeper issues the long-term market position) or reduce pay- like net income, as HWL offers all growers free- ments to growers. on-request access to an agronomist, but admit that Despite these explanations, many growers pro-active advice is targeted towards new growers were not convinced and were understandably (Interview 2). dissatisfied. One suggested that: This situation reflects the evolution of organic production in both Canterbury and Bay of Plenty. “Watties had no reason to reduce the In both those regions, companies engaging in the premium because they still get the same price initial development of organic processing and/or for organic sweet corn in Japan. Sure, they had export enjoyed considerable grower loyalty for to reduce the conventional price because the several years, especially when the initial market prices they receive for it went down, but they windfalls for organic products were passed on. did not have to reduce the organic premium – Then, with a reduction in premiums and/or the they’re just taking more profit from it” development of alternative outlets for organic (Interview 18). produce, growers either parted company with the original businesses or protested over a range of Regardless of the validity, or lack thereof, in grievances. For the NZ Kiwifruit Marketing this argument the premium for organic producers Board, this phase was seemingly short lived as its relative to conventional production is almost premium and net returns for organic kiwifruit identical in the period after organic price reduc- increased markedly in the 1996/97 season, effec- tions. While the average gross margin per hectare tively silencing most critics and perhaps pinpoint- for organics reduced by 34%, the relative premium ing the real source of their discontent. However, for organic produce remains almost the same the Board is a monopoly and in sectors where because of the equivalent reduction in gross competition is more open, the long-term loyalty of margins for conventional sweet corn (Table 4.3). growers – which is very important given the HWL suggests that these trends will continue into sizeable investments in human resources (“up- the future – both sets of prices will fluctuate skilling”/technical transfer) required for organic relative to demand for sweet corn lines but the production – may become an important issue. In relative advantage in organics will be retained Canterbury, the best example of this dynamic is (Interview 1, 8). actually a grower cooperative/processor and Nevertheless, the organic price reductions these issues remain unresolved as grower pay- have partially soured relations between HWL and ments are still a matter of contention between its growers34. Consequently, despite the relative growers and the processor. premium remaining the same, these reductions in In conclusion, it is evident in the Gisborne net income, and also the uncertain future for the case, as well as in the other study regions, that HWL Gisborne plant, have reduced the loyalty of there are positive aspects to the relationships some of the core organic growers to HWL. One between organic growers and their processors, grower refused to accept a contract with Sunrise with the potential for considerable good ººwill to Coast because of the assistance that he received develop, particularly in the development of new from HWL to establish his organic sweet corn organic growers and technology transfer. How- property (Interview 19). Others said that they ever, these relations are not immune to many of would have been similarly loyal to HWL – mainly the stresses and pressures that characterise the

33 See the comment on organics as ‘keyhole’ products in Section 3.1.1. 34 This was, of course, also the case with conventional suppliers. However, it might be argued that they are more frequented with such fluctuations. This was the first major reduction in price for organic sweetcorn producers and their dissatisfaction probably relates to their initial beliefs that organic prices would be more stable than those for conventional production.

29 production and processing of other, conventional in 1996. Like Leader Brand, Kiwi Organics was commodities. This becomes particularly evident also formed with the belief that scale economies when financial returns for organic products could provide leverage in the organics market. decrease. While the results from the different Indeed, the company has already had some regions are similar in that all growers react nega- success in obtaining such leverage. Its members tively to declining returns, the long-term out- successfully negotiated a higher rate for the comes of this disenchantment seem to vary by transitional squash grown on all four properties in region. Gisborne is particularly significant as it is return for selling fully certified squash on two of the first region where growers have mobilised to the properties to the same exporter. With organic attempt to control returns35. Possible explanations supply limited, the pooling of produce from a as to why the Gisborne growers differ from their number of farms into large consignments provides counterparts will be discussed in the next section. an added incentive for exporters to give Kiwi Organics special attention. The aims of the com- 4.2.3 Grower involvement in processing pany are: and marketing “To have it driven by the grower. We’re A tendency which is related to concerns over trying to get some power back to the farmer. I falling prices for sweet corn is that organic and mean we are price setters rather than price conventional sweet corn growers are increasingly takers – that’s going to be a basic principle of looking for new outlets for their produce. Some the group because so many farmers just take have shown interest in forming their own compa- what’s given. We want to have a bit of control nies to take on more responsibility for arranging and we’ll only grow things if we know what downstream processing and marketing, and this is we are going to get for them” (Interview 21). not only restricted to sweet corn growers. For example, Leader Brand Products Ltd. developed While all four growers intend to maintain their largely out of the success of one grower who relationship with HWL, the formation of the produced a range of vegetables – capsicums, company has led to increased diversification of potatoes, onions, broccoli, tomatoes and squash – the types of produce grown. The group is about to for both fresh-market and processing industries invest in equipment for pressing organic linseeds (Interview 5). Through the 1990s, the manager of (Linum usitatissimum) to oil and for making pow- Leader Brand became the largest single horticul- ders and purees from organic kumara (Ipomoea tural grower in Gisborne District, owning 1000ha batatus), sweet corn and squash. This will allow its and leasing a further 2000ha. He was New Zea- members to add value by processing their own land’s largest tomato grower and had a close produce in the winter. They have already suc- relationship with Cedenco but, when Cedenco’s ceeded in pooling equipment, with one grower tomato processing facility closed, the company owning a much-valued but highly expensive sought to diversify its options36. It has initiated harvester which he also uses on the other proper- plans to convert land to organics, with the inten- ties (Interview 20). tion to grow organic squash on 30ha, and has also There is a degree of naive optimism in the shown interest in producing organic broccoli in suggestion that growers can be “price setters”. In the off-season. Previously, Leader Brand’s squash the history of capitalist agriculture, growers’ has been exported by Sunrise Coast, but it has also cooperatives have seldom been able to influence at times exported some of its own produce and the market, although well organised groups can believes that there may be further potential to sometimes exert leverage on the returns generated export its own organic lines to Japan under the by processors and exporters of high value goods. Leader Brand label. Whether this occurs or not, it What currently distinguishes Kiwi Organics from is the manager’s belief that scale economies will other attempts to organise growers into ‘price enable the company to get a better deal with setting’ structures is that, because the company’s exporting companies (Interview 5). members own the major part of certified organic While Leader Brand provides an example of land in Gisborne, they have some control over the how conventional growers have recently restruc- supply of organic sweet corn and squash – pro- tured their activities, similar developments had duce which requires a considerable skill-factor for already occurred locally in the organic sector. its production. Consequently, it is difficult for Managers from the three largest organic sweet purchasers of their products to easily substitute corn properties, along with a new entrant to from other sources. Evidence from wider agricul- horticulture, formed the company Kiwi Organics

35 There have been episodes of organic grower rebellion against the NZ Kiwifruit Marketing Board in the early 1990s, but these have since subsided. 36 Leader Brand now grows no tomatoes, but the land on which tomatoes were grown is now devoted to other crops.

30 tural developments suggests that, in the long Gisborne was a blank slate in terms of organic term, a proliferation of suppliers to market niches history and BIO-GRO NZ is perhaps able to eventually undermines these kinds of attempts to operate there unfettered by past conflicts. The control the ‘price setting’ process. On balance, the positive tenor of current relations may not last development of this type of company reflects the forever. As an independent certifier, BIO-GRO NZ fact that organics is slowly heading in the same may be called on to make decisions in the future direction as other agricultural spheres, with which greatly displease some growers, and the skilled growers increasingly attempting to co- following two issues will warrant close attention operate with each other in response to limited in forthcoming years. power in the market. Their long-term success in The first is the possibility that pragmatically maintaining such attempts remains to be seen. oriented sweet corn growers – primarily interested in premiums – may exploit soil fertility for short- 4.2.4 Long-term issues: fertility vs term profits, rather than protect their soil for longer-term sustainable production. Because of premium and total conversion of property the pioneering nature of organic sweet corn As a case study area, Gisborne can be usefully production in Gisborne District, there is some compared to the developmental path taken in debate as to how long growers can produce other regions. This section highlights three signifi- organic sweet corn in individual paddocks before cant differences between Gisborne and other there is a requirement for a summer fallow (eg. in regions, all stemming from the fact that no signifi- clover). In Section 3.3.1, it was explained that cant organic industry existed prior to the develop- sweet corn depletes nitrogen from soils at a ment of exporting. These three issues are: relatively high level for an organic crop and that there had been some controversy over the fallow • Relations between growers and BIO-GRO NZ; requirements for organic sweet corn. This contro- • The need to balance returns against fallowing versy quickly receded after the first two seasons as periods; growers succeeded in using a green manure crop • Whole conversion of properties. over winter. However, with some growers having now produced organic sweet corn in the same The latter two issues apply, in particular, to paddock for five seasons, the issue has once again sweet corn growers. While their motivations for become salient. Although rotational options are converting to organic production will be discussed now available, some growers were reluctant to in detail in Chapter 5, for the purposes of the utilise them because they would not receive the immediate discussion it is important to note that same revenue as they do for organic sweet corn. organic sweet corn growers appear to be more Furthermore, it is possible that there will come a pragmatic and driven by the desire for premiums time when a summer fallow will have to be built than some of their colleagues both in Gisborne into the medium-term plan, because rotation of and in other regions who do not produce sweet crops alone will be insufficient to protect soil corn. This is especially so in the case of a small fertility. One grower, having noticed progressive group of growers. While this group is not numeri- reductions in yield on some areas of his property, cally large, they represent a large proportion of the has already placed three paddocks into clover for total volume of organic food produced in the 1997/98 season (Interview 19). Nevertheless, Gisborne and, therefore, their position requires while they recognise the need for this require- elaboration. ment, other sweet corn growers are delaying such The first of these issues is the relationship a fallow until it is either absolutely necessary, or between growers and BIO-GRO NZ. In every until BIO-GRO NZ compels them to in order to other region, some growers expressed discontent retain certification. Given the level of the organic at some aspect of BIO-GRO NZ’s operation. This premium, they would miss out on a considerable level of discontent has become an accepted feature amount of revenue, but this will surely lead to of the industry37. To date, Gisborne growers some conflict with BIO-GRO NZ. appear to have had good relations with BIO-GRO A second issue that relates to the longer-term NZ, and commented that the BIO-GRO certifica- strategies of growers is the requirement under tion procedures were simple to follow and BIO-GRO NZ for total conversion of properties to straightforward to grow under. This raises an an organic regime. One of the significant changes intriguing question which cannot be elaborated on in the practice of the BIO-GRO board in the early here, but warrants further consideration at a later 1990s was the acceptance of partial conversion of date. Namely, to what extent is lingering discon- properties as a stepping stone towards full conver- tent with BIO-GRO NZ in other regions attribut- sion. Although there are no rigid time-criteria set, able to long-term debates and conflicts over and while it is allowable to certify paddock by organic growing in each region? As a region, paddock, it is the stated intention of BIO-GRO NZ

37 In fact, some would argue that this was also the case in the 1980s.

31 that individual growers should be in the process organic grower body and a lack of grower of converting their entire property. While most networking in the past needs to be remedied. It Gisborne sweet corn growers appear satisfied with is revealing that few of the commercially- this situation, some have no intention of doing so: oriented sweet corn growers have joined the Tairawhiti organic producers and consumers group, “We are really using the organic thing – even though some of the other export growers because of the premium – to get the farm in have become members. good order before my son takes over. You • The importance of premiums is a contested know, we’ve also expanded with more [stock- issue among companies, growers and BIO- grade] maize production over the hill. You GRO NZ, and even within the promotional can’t get an organic premium for [that] so strategies of companies like HWL. In Canter- there are parts of the property that we never bury, GOWW details on premiums and average intend to convert. Then you’ve got to think of yields did not result in growers adopting the hill sections where we have stock. Maybe pragmatic responses to issues of long-term one day you could get a premium for organic sustainability. In Gisborne, the same GOWW beef, but not today. There’s no way an owner material resulted in the opposite outcome for on a mixed property would want to certify the some sweet corn growers, with the organic full property. We aren’t even intending to premium perceived by them as the main reason certify all the sweet corn land…” (Interview for conversion. This may hold wider implica- 20). tions for the extension of organic development to other regions with no prior history of or- BIO-GRO NZ were aware of this type of ganic production. problem and suggested that out of all of the • The issue of ‘progressive conversion’ – in regions it was most prevalent in Gisborne District which initially pragmatic growers start to and especially with sweet corn growers (Interview adopt wider organic goals – is vital for all 25). organic producing regions and must play a In combination, the issues of fallowing and major role in determining the rapidity with whole-property conversion concern only a portion which the BIO-GRO inspectorate acts to with- of the sweet corn growers, but because of their hold or revoke certification. The degree to preeminence within the local organic industry that which Gisborne growers experience a level of group warrants further discussion. Three possi- ‘progressive conversion’ will become apparent bilities are open to these growers. The first is that in the next few years. they will respond to declining returns caused by fertility depletion by exiting from organic produc- Whatever the case, it appears that the notion tion. Chapter 5 discusses this option in more of an organic premium as it has come to be under- detail. A second possibility is that growers that are stood by Gisborne growers is a dynamic which currently pragmatically oriented will undergo has encouraged some growers to exploit soil ‘progressive conversion’, adopting more of the fertility in the short-term, possibly at the expense wider goals of organic production as they con- of longer-term sustainability. This may be an tinue to participate in the industry. This has important lesson for companies desiring to estab- certainly happened to many growers who were lish an organic program through the conversion of initially pragmatists in other regions, particularly its conventional producers. It appears that the way the Bay of Plenty. Indeed, there is some evidence the organic premium is initially sold to and that this has in part occurred in Gisborne. While perceived by growers is a crucial element in long- this possibility exists, BIO-GRO NZ will not, in the term sustainability of the organic industry. short term, initiate punitive measures against these growers. However, initial signs are that 4.3 Emergent organic industries some sweet corn growers in Gisborne are resisting wider changes in their outlook. Should this in Gisborne District situation persist into the medium term then the third option will take force: BIO-GRO NZ will Potential conflicts over the process of BIO-GRO probably revoke their certification. certification are also noticeable in some of the It is difficult to pinpoint exactly why this emergent organic industries in Gisborne District, situation has emerged in Gisborne. Three factors, but these stem from very different causes to those however, might need to be addressed by the local for sweet corn. Although BIO-GRO NZ has a industry to avoid a conflict over certification in “catholic attitude to all production spheres” that the future: can be incorporated under its auspices (Interview 25), it has thus far tended to deal mainly with • The lack of any organic history obviously vegetable producers and with some fruit growers, contributes to this situation. Unlike other particularly kiwifruit orchardists. Perhaps for this regions, Gisborne has only recently formed an reason, its organic criteria are sometimes difficult

32 to apply to potential organic industries that fall certification. Given that parasites only occur in outside of this norm. In this section, three emer- one year out of a deer’s lifespan – after weaning – gent industries – deer, wine and ‘exotic’ fruits – there is some hope that the first problem can be are examined. Local innovation and near sub- overcome. Both have experimented with a mixture tropical growing conditions, which were explored of cider, garlic concentrate and seaweed which, in Chapter 2, make the Gisborne District a site for while administered in the manner of a drench, the evolution of new primary industries. It is does little more than act as a tonic. In the initial notable, however, that the first people to attempt seasons, both had concerns about convincing MAF certified organic production in Gisborne were a veterinary staff that they were not being unduly deer farmer and a viticulturist. Yet, it is those very inhumane to stock. Under MAF legislation and industries which have had the most stunted the BIO-GRO standards, farmers can be pros- evolution of all the production sectors to experi- ecuted or de-certified for failing to come to the aid ment with organics. of distressed stock, including stock badly infested with parasites. Because the general health of their 4.3.1 Venison and velvet stock was good, neither had encountered this Although this series of reports mainly con- difficulty, but this issue highlights some of the cerns horticulture, organic venison farmers in the infrastructural difficulties for farmers of organic district were interviewed because of the relative stock which do not apply to organic uniqueness of their operations38. Generally, the horticulturalists. meat production sectors have been the slowest to After considerable research on how deer were adopt organic production methods in New Zea- farmed in Europe during the 1930s, the second land. Consequently, the BIO-GRO standards for farmer decided that “old fashioned management meat production are still evolving. However, the techniques of keeping clean, good quality pasture venison industry has, since its inception, been in front of the deer” adequately countered the targeted to niche markets, so it is likely to move effects of not using drenches (Interview 24). For into organics more quickly than other meat sec- the long-term, the first farmer wants to experi- tors. In Gisborne, two farmers made moves ment with a mixture of wormwood (Artemisia towards organic husbandry of deer, representing absinthium), black walnut (Juglans nigra) and some of the first primary producers to consider cloves (Syzygium aromaticum) that will act as a true the export of organic meat. Significantly, both organic drench. This would be permitted under these farmers have since abandoned their their BIO-GRO NZ rules. Initially, however, both attempts to produce certified organic venison. growers found it difficult to apply BIO-GRO While one still hopes to continue under an organic criteria to their operations. Because of the relative regime and awaits changes in the industry which novelty of organic deer farming and the amount of will permit re-certification, the other has aban- time devoted by BIO-GRO NZ to developing doned deer farming altogether. Difficulties standards for major organic products, it is possible brought about by the structure of the deer indus- that the BIO-GRO standards for pastoral farming try as well as difficulties meeting the BIO-GRO have not evolved as far as those for horticulture. standards were seen as the prime reasons for the For this reason, one farmer only certified his failure of organic deer farming. property under BIO-GRO after abandoning the The first farmer to attempt the production of deer industry to grow crops. organic venison was also HWL’s first organic While many technical issues appear to have sweet corn grower39. Generally, this farmer has a been overcome, the inability of the farmers to philosophical commitment to organics, but he also market their venison as organic has been their desires to prove that organic deer farming can be ultimate difficulty. Like other producer marketing conducted in a profitable manner (Interview 23). boards, the Game Industry Board has a monopoly The second farmer decided to convert to organic on marketing. The two growers involved suggest production because of a concern about the effect of that the Board is very progressive compared to drenches on overall stock health and also because other such Boards, but has not yet established an of the influence of a business partner who wanted export organic line. The Board argues that while a high-value and niche-oriented agricultural the demand might be sufficient there is not yet the investment to which he could apply a marketing volume of supply to warrant such a move. Of degree (Interview 24). course, this stance further dissuades farmers from For both farmers, three barriers need to be converting to organics and so further restrains the overcome: parasite control, industry infrastructure growth of supply. Both the organic deer farmers and problems with taking velvet under organic interviewed argued that because the Board is progressive, it would eventually establish an

38 Initially, they were chosen for interviewing because of their early role in organic sweetcorn production, but the information they provided on the organic deer industry was too important to leave out of this report. 39 See Section 3.2.1.

33 organic line. Nevertheless, in the meantime, the organic grapes (Vitis vinifera) because such people Board’s ambivalence has severely affected the are able to pay an organic premium. Wine produc- merit of being organic for the two farmers. Be- ers also have the ability to market the identity of cause they could only sell their produce as organic their wine unlike many other food or beverage on the national market, they failed to receive the products because the product typically travels full premium which is potentially open to them from winery to table in the maker’s bottle. Conse- through exporting. Not long after the second quently, there is added scope for marketing an farmer abandoned deer farming, the first pulled organic identity for wine. However, this market out of BIO-GRO NZ certification because “there potential is seldom realised because of the difficul- was no economic benefit in being BIO-GRO ties of growing grapes, which are particularly certified if I had to export my venison as conven- susceptible to fungal and pest infestation. Tradi- tional” (Interview 23). tionally, viticulturists have been dependent on These infrastructural difficulties are amplified high quantities of lower-order fungicides. As for the case of organic velvet. The market for resistance has built up to these, however, there has organic velvet is potentially large because its main been increasing use of even more environmentally use is in health food remedies, and those inter- detrimental chemicals, including the use of sys- ested in such remedies show a marked tendency temic fungicides. Compared to other horticultural to buy organic produce. However, MAF criteria industries, there is a relatively higher degree of state the need for an anaesthetic to take velvet, scepticism in the wine industry as to the ability of and anaesthetics are not permitted under BIO- growers to produce organic grapes (Interviews 15, GRO NZ standards. While there are humane 16). Regardless of this scepticism, two growers methods for taking velvet without an anaesthetic, have succeeded in establishing an organic regime these are as yet not permitted under either MAF in Gisborne District and have been rewarded with or BIO-GRO regulations. The two organic deer considerable premiums. farmers made formal requests to the Game Indus- The first established his organic regime in try Board, asking that it negotiate with MAF to 1984, and was the first certified organic grape allow these methods. However, there are specific grower in NZ. Utilising some Biodynamic/ political issues which have prevented the Board Steinerist methods, he produces Chardonnay and from being proactive in this case: Riesling on 25ha (Interview 16). He also owns his own winery and now sells 15,000 cases of organic “In most European countries it’s illegal to wine each year, with his largest single buyer being take velvet: they consider it inhumane, which an English supermarket chain. The other organic is an emotive argument not based on anything viticulturist makes a small amount of organic at all – but it’s good for us because it reduces Pinot Noir, but most of his organic grapes are the amount of velvet on the market. It does, blended with non-organic grapes sourced from however, provide some ammunition for the other properties and, consequently, his wine is not animal welfare lobbyists and potential trade sold as organic (Interview 15). barriers. It’s a politically sensitive issue and Both argue that strictly they produce “wine it’s not something you can rush. So with that from organic grapes” rather than “organic wine” as a context, the organic velvet thing is going because it is not yet possible to make wine in to take a long time” (Interview 23). Gisborne without a preservative, usually sulphur dioxide. International organic standards - includ- In the second report from this series ing BIO-GRO - allow for up to 110ppm of sulphur (Campbell et al. 1997), it was established that the in organic wine. This is a more than sufficient Kiwifruit Marketing Board acted in a manner level to preserve the growers’ wine, so their which accelerated the uptake of organic kiwifruit caution about their product relates to their own production. However, the opposite can also be perceptions of what organics should be rather true of producer marketing boards. Those boards than their inability to meet specific criteria. De- with an ambivalent attitude to organics, especially spite their caution, both sell their product as when they have a monopoly in marketing, can organic. Australian viticulturists have recently inhibit the growth or organics, as is shown by the pioneered a system of making organic wine case of the Game Industry Board. Similarly, it is without sulphur dioxide, but have done so on not always easy to be industry pioneers in organ- land with a much lower pH level than is evident ics when the development of organic standards for in Gisborne District. It is difficult to abandon the individual products is at an early stage. use of sulphur dioxide on soils with a high pH, because high alkalinity will advance the oxidising 4.3.2 Wine from organic grapes process (Interview 16). Both growers contended Given that it is generally consumed by people that the requirement for less than 110ppm of with a high disposable income, there is a strong sulphur was one of the few specific rules that BIO- potential premium for wine produced from GRO has for viticulture. One complained that “the

34 standards for BIO-GRO in relation to a vineyard committed ‘suicide’ on purpose. I knew they aren’t that specific, but that actually makes them would kick me out if I used Applaud again, more prohibitive” (Interview 15). but by that stage I believed that I no longer Vines are also attacked by powdery mildew needed BIO-GRO. Success in the wine (caused by the organism Uncinula necator) and business is based on personal knowledge of mealy bug (Pseudococcus longispinus). The former the viticulturist’s label and winery. I had can be managed under an organic regime with gained a good reputation for producing great application of sulphur; the latter can be brought wine and everyone knew it was organic. So under control by use of garlic and pyrethrum, but why bother with BIO-GRO? There was also only on relatively healthy vines. On vines under the fact that neither the Wine Institute nor stress – which is generally the case in the years BIO-GRO support the development of organic after grafting of rootstock or in particularly wet or wine. I thought that our reputation would dry years – mealy bug is extremely difficult to carry us through and I wasn’t going to change control on an organic basis (Interviews 15, 16). In the organic production process because I’m terms of soil fertility, viticulturists have the exact committed to Steinerist philosophies. But opposite problem to most organic growers. Soil when the European market found out they nitrogen must be kept to low levels as the objec- said ‘Hang on we only bought your wine tive is to grow fruit not leaves. Fertility on both because it was certified organic’. So now I’m in properties was managed simply by composting the process of getting the certification back40” grass cuttings and prunings. In order to lower the (Interview 16). level of rapidly available nitrogen in the soil, growers also plant oats and chicory between rows The other grower also commented on the lack of vines to take nitrogen away from the roots of of support from the Wine Institute of New Zea- the vines and also to absorb excess water. land as being a fundamental problem. Without Both were convinced that it was possible to their endorsement, and without endorsement convert most established vineyards to organic from any of the large-scale wine producing com- production. However, they also contended that it panies, few growers are convinced to go organic. was extremely difficult to start a new vineyard Some wine varieties are made by blending grapes under organic criteria. With a larger demand for from several vineyards, so even though both these his wine than he could supply, the first grower growers have their own wineries, they cannot attempted to certify a new vineyard on a hillside maximise the throughput of their wineries or the from 1989 but could not successfully control a composition of their wines. This is particularly the weed problem. He believed that, “In retrospect it case for the second grower because he has only was only economical to run that using herbicides. 8ha of organic grapes but needs grapes from over I tried a line-fed weed cutter but even that did too 50ha to derive the best capacity for his winery. At much damage to the vines” (Interview 16). The present he sources grapes from eight other grow- problem of establishing a new organic vineyard ers and while he “offers a premium to these relates mainly to the transplanting and grafting of growers to go organic none of them will do so rootstock. It is usually seven years before a new without an industry lead” (Interview 15). Because vineyard will reach adequate vine health and of these problems he will not renew his BIO-GRO production. Transplanted rootstock comes under certification for the coming season but will never- stress in those years, and, in a stressed state, the theless continue to produce grapes under an first grower’s vines were attacked by mealy bug, organic regime. He believed that the fees paid to but the allowable soaps, oils and pyrethrum and BIO-GRO provide no financial benefit because it garlic mix failed to make a difference. Frustrated was difficult for him, a small grower, to market his by two years of such problems, he used Applaud – produce as organic overseas without a Wine a conventional insect growth regulator – on some Institute marketing campaign for organic wine. He of the vines. Reprimanded for this in 1994/95, had also experienced too many problems with when he used Applaud again in the subsequent spray drift – to which grapes are particularly year, his BIO-GRO certification was revoked – a susceptible – to continue to be certified as organic. notable event because the past successes of the Both growers have more hope for an Inte- grower with a difficult crop had brought consider- grated Wine Production (IWP) scheme, which able legitimacy to BIO-GRO NZ on the national mirrors the low-input approach of Kiwigreen for level (Interview 25). kiwifruit (see Campbell et al. 1997). The first The grower’s reasoning behind this breach of grower has signed up his troubled hillside vine- rules is also notable: yard and the second his entire vineyard for this scheme. It is based on a score-card system devel- “BIO-GRO hardly kicked me out. I oped in Switzerland, and is therefore a voluntary

40 The grower’s certification status has now been restored.

35 system which seeks to reduce post-emergence industry. But it may also apply to smaller, niche- sprays as well as reduce other fungicide and oriented industries such as those of exotic fruits. herbicide residues. Whereas the evolution of As is the situation for wine, many such fruits are organic wine has floundered, the two growers consumed by wealthy consumers and so they may believe that IWP will be successful because the desire to pay extra for low-input or organic large company Montana has encouraged its produce. growers to become involved. Montana have a This is already the case for the persimmon target of no herbicides on all its grower’s proper- industry on the East Coast. Gisborne is one of only ties within three years, showing the extent to a few districts in the country where persimmons which wine producers are prepared to act to meet can be grown commercially because they require health and safety concerns in the market. relatively hot summers. Generally, the Japanese In recognition of the potential for market persimmon tree is grown in New Zealand, yield- access problems in the long term, the Wine Insti- ing a red-orange fruit of high quality and com- tute has initiated an industry-wide response. One manding a high price. The advantage that persim- cause of this change occurred when its motto – mons have for organic growers is that the fruit is ‘the riches of a clean green land’ – received bad produced in a manner which is close to organic press in overseas media, especially in a Canadian from the start. Persimmons have relatively few publication which stated that New Zealand wines problems with pest infestation and so few chemi- had the highest level of residual fungicides in the cals need be applied (Interviews 4, 10). They are world (Interview 16). Nationally, 130 growers relatively low-yield and so cause few problems have already agreed to the IWP program which with soil fertility. Organic persimmon orchards will start in full during 1997/98. With the prospect have proven popular with lifestylers, especially of even more growers becoming involved in this retirees desiring a low-fuss and small orchard but project, the two organic growers in Gisborne with high profitability to act as retirement income. believe that they can only stand to benefit. First, Consequently, organic persimmon orchards in they will be able to source more low-input grapes Gisborne District tend to be small. Currently, 3 with which they can blend their own grapes and orchardists produce organic persimmons on 16ha can then market the result as an alternative to in Gisborne. They are exported mainly by one firm their organic wines. They even suggest that which specialises in niche products. growers will use the IWP program as a step Mandarins also grow well in Gisborne District. towards full organic production. Second, they Although there are as yet no organic growers, the believe that the IWP program will lead to much president of the local branch of the Fruitgrowers lower levels of spray drift. Federation believed that “some growers are very Despite the move towards IWP, development close to converting” (Interview 10). This is for of organic production within the wine industry similar reasons to those growing organic persim- has experienced similar difficulties to the case of mons. Mandarins are also grown in a manner organic venison and velvet. Wider structural close to organic production when grown conven- features of the wine industry affect the pursuit of tionally. Except for weed control and the occa- organics by small and medium sized viticulturists. sional use of fungicides, very few chemicals are Although the Wine Institute is not a monopoly used. Although Japanese growers produce enough marketer, its reluctance to formally endorse mandarins for the fruit to be one of Japan’s few organic production has undoubtedly restrained export crops, the Japanese off-season dovetails growers from converting their vineyards. Further, with the Gisborne growing season. Several man- both viticulturists in Gisborne District could not darin growers also grow kiwifruit. Although every develop their wineries to the extent desired kiwifruit grower in Gisborne is now in the because they could not obtain organic grapes from Kiwigreen program, none are yet organic (Inter- other growers for blending. In the case of wine view 4). This is set to change for the coming production, a high level of structurally-necessary season. Kiwifruit production grew rapidly in inter-dependence among growers has acted as a Tolaga Bay during the mid-1980s, but with the barrier to the development of organic production. closure of the Tolaga Bay packhouse, only three of the original sixteen kiwifruit orchardists remain41. 4.3.3 ‘Exotic’ Fruits: towards both organic All three of these growers will convert to an organic regime from next season (Interview 17). It and green labelling is inherently costly for them to transport their crop The previous section suggests that some to Opotiki to be packaged. To make up for this industries may see a more rapid development of cost, the growers now seek an organic premium. low-input systems than organic systems. This may Many other fruit growers are signing up for especially be the case for large industries with a another low-input system, the locally organised producer marketing board, such as the kiwifruit Eco2000 initiative. Eco2000 was established to showcase Gisborne District sustainability pro- 41See Section 2.3.

36 grams for the year 2000 celebrations (Interview universities on the evolution of organic produc- 11). In that year many executives from global tion was shown to be positive. While many of the companies will visit New Zealand after the Syd- skills for organic production represent a simple ney Olympics (Interview 10). It is hoped that this borrowing of techniques from the pre-chemical program can merge with other tourism initiatives history of horticulture, information transfer is a to advertise local organic and low-input indus- key ingredient in the mix of factors that contribute tries. So far the program has gone little further to a region becoming an important growth centre than educative and knowledge-transfer objectives, for organic production. Lincoln University re- but has nevertheless proven popular with searchers helped growers with such technological orchardists. Its objectives are working in parallel advancements as flame-weeders (see Campbell to the government and industry funded national 1996). The Polytechnic developed trust – Project98 – which has similar objectives of several biological pest controls and new tech- fostering low-input agriculture and horticulture. niques for composting which assisted organic Tradenz is helping to promote Eco2000 and hope kiwifruit growers (see Campbell et al. 1997). to have it confirmed as a Hanover exhibition Although Gisborne has its Tairawhiti Poly- (Interview 11)42. Organisers of Eco2000 suggest technic, that institute is relatively small and that it has been far easier to convert growers to the courses in horticulture are limited. No specific merits of the project than it is to convert them to courses on organic methods are offered. Conse- organics because there is not the 2-3 year conver- quently, growers complain that they are at a sion period inherent in BIO-GRO certification disadvantage compared to growers in other (Interviews 10, 11). Undoubtedly, this is because it regions who can hire labourers who have been is far easier to state a preference for sustainable well-trained in organic methods. Some have land management than it is to practice it. Never- circumvented this problem by joining such organi- theless, it seems likely that parallel systems of sations as Willing Workers on Organic Farms organic and low-input horticulture will continue (WWOOFers), thereby allowing foreign tourists to develop in a mutually reinforcing manner in trained in Europe to work for keep on their Gisborne District. properties (Interviews 13, 18). Nevertheless, it was generally difficult for growers to attract suitable 4.4 Impediments to the expansion workers on a long-term basis. Labour was consid- ered an extremely important issue because, “You of organic production in Gisborne could have just one ignorant, untrained or lazy employee ruin your organic status for years” District (Interview 15). Gisborne is 300km from the nearest Despite the rapid uptake of organic produc- university and 150km from the research station at tion by growers in comparison to other regions, Hastings and some believed that the region’s especially by sweet corn growers, there are some isolation from research centres was a serious identifiable industry-level barriers to accelerating impediment to the growth of organics (Interview the uptake of organic production in Gisborne 4). This was especially the case for wine growers: District. Constraints at the grower level will be both viticulturists interviewed believed that if considered in the next chapter. Throughout the they had been closer to a research institute or interviews two industry-level impediments were MAF research station then they would have regularly highlighted: attracted more research which could have aided their organic regimes (Interviews 15, 16). One of • The fact that Gisborne does not have a signifi- those growers has had researchers from Massey cant research institute and is isolated from University complete studies on his property in the those of other centres; past – projects which considered the use of bicar- • The general lack of flat land in single title bonate of soda to control powdery mildew and which is accentuated by the difficulties grow- biological controls on mealy bug – and found ers experience when attempting to lease land these invaluable. However, this research has been for organics. curtailed, partly because of the travel distances involved. In this context, the technology transfer pro- 4.4.1 Lack of a research base grams of the larger companies are of immense The Eco2000 initiative, which was considered importance. HWL have invested a considerable in the previous section, was established partly out amount of time and money into organic technolo- of recognition of a technology-transfer problem in gies and biological control measures. Attention the Gisborne organic industry (Interviews 10, 11). has been paid by the company to biological In both the Canterbury and Bay of Plenty case controls and recently it has co-operated with the studies the influence of local polytechnics or

42 Hanover is a large expo of sustainability projects from around the world.

37 activities of a Ph.D. student who is examining because such an arrangement implies a lack of methods of biologically controlling the GVB. long-term commitment. One grower has even However, many of the other companies involved experienced an ambivalent reaction from BIO- in Gisborne District are either too small to afford GRO NZ to his plans to convert a section that he this level of research commitment, or have not yet leases from his wife (Interview 20). Nevertheless, approached any of the government funding BIO-GRO have some legitimate concerns about channels open to small businesses, and the prob- leasing for organics. It is particularly difficult to lem of research remains an impediment to the see how the idea of a summer fallow after several future growth of organics. seasons of organic production, or even extensive use of crop rotation, could be built into a lease 4.4.2 Leasing and organics arrangement. Lease contracts are usually depend- With the extent of land in multiple ownership, ent on a reliable and consistent annual income – the issue of leasing for organics has recently there are generally few margins for error in a lease become a significant issue in the Gisborne organ- arrangement and land management takes on a ics industry. Some of the growers who pioneered more short-term orientation. Therefore, there is organic production in the early 1990s have little scope for organic leasing when every fifth reached the point where they can no longer certify year or so may require a fallow. Consequently, the any more land on their own property. Having prospects for leasing are linked to the successful benefited from their early conversion in terms of development of organic rotations including sweet five or more years of organic premiums, those corn which may not require a fallow period. While growers want to expand. However, there is little Gisborne is the first region to trial a sweet corn/ land available to buy which could be subsequently pea/squash and green crop rotation it will take converted and leasing is the more obvious route to several years for it to be confirmed whether it will follow. One grower who has already certified all provide a viable solution to this set of problems. the land on his property is particularly keen to These issues are particularly relevant to Maori find land available for lease but has so far been land. Under successive Native and Maori Land unable to obtain it (Interview 18). Alongside these acts, Maori have only been allowed to alienate growers, HWL itself is showing more interest in their land through leasing in certain circum- leasing land for organics, and at least one other stances. Under the more recent Te Ture Whenua company, Leader Brand Produce Ltd., is interested Maori Act (1993), restrictions on leasing have been in registering leased land with BIO-GRO for clarified so that it is now probably easier to lease organic certification. out Maori land. However, restrictions still exist There are two difficulties in leasing land for which make the leasing of Maori land for organics organics: one concerning the status of leasing by an alien less than straightforward. Land trusts under BIO-GRO NZ and the other concerning the are not allowed to lease at all and incorporations ability of Maori with land in multiple-title to lease can only do so for a maximum period of three their properties. One interviewee summarises the years. A grower with management control guaran- first of these difficulties: teed only for three years is only likely to be certi- fied by BIO-GRO NZ if there is evidence that the “I think that leasing is a very grey area that overall owning group is committed to long-term BIO-GRO haven’t made up their mind about organic production. Furthermore, with the build yet – they don’t know how to deal with it. up of natural soil fertility – through the use of There’s been a couple of instances lately where RPRs and organic composting – taking about five there was organic land being farmed but not to seven years before peak condition is obtained very well by the landowner. Subsequently (Interviews 6, 23), growers would need more than they’ve lost a lot of money and the bank has a three year lease to see the merit in committing said ‘well, we’re not prepared to finance you the necessary resources to convert. Consequently, this year’ and they’ve had to lease the land there are barriers to successful development of out. The problem in that case is that when they leasing as a mode of organic development which lease their land they don’t want to lose their are only currently starting to be addressed by BIO- certification. Now, the BIO-GRO certification GRO NZ, HWL and local Maori incorporations. is based on property, person and product, so immediately if you take the person out.... You’ve got to find someone who is already certified or can prove that they are suited to be certified” (Interview 12).

The philosophy of BIO-GRO NZ is that organ- ics should be a long-term proposition. Therefore, it is wary of those wanting to lease for organics

38 Chapter 5 growers decide whether or not to grow organic products. The decision trees in each study had a Grower decision making similar overall structure. The results from each of these earlier studies have been used to develop a decision tree based on a combination of the two in Gisborne District data sets (Fairweather, ND). Given this prior n this study of grower decision making, the knowledge of decision making, based on diverse general purpose is slightly changed from that types of farmers and growers, we expected to find in the earlier studies of Canterbury and Bay of similar patterns of decision making in Gisborne I District since it has a broad mix of land uses which Plenty. For Canterbury (Fairweather and Camp- bell 1996) and Bay of Plenty (Campbell et al. 1997), parallel those in Canterbury and Bay of Plenty. the research was unprecedented and generous Thus the decision tree should be similar. However, samples (43 and 48 cases respectively) of farmers there may be some distinctive aspects of the and growers were used to develop decision trees Gisborne District situation which manifest in that represented and explicated how farmers and some modifications to the decision tree. The general purpose then was to interview a variety of farmers and growers and identify their [GROW ORGANIC: DON’T] decision criteria in order to (27 cases) assess how well the existing decision tree applied to Gisborne District. As the following results will show, our 1. Don’t know much about organic expectations were justified and farming; never really considered it? YES the original decision tree is (0 cases) relevant to Gisborne District. NO (27 cases) Some slight amendments were necessary, and we will show that these minor changes reflect 2. Well satisfied with present farming the particular situation in system and like or need high yields YES Gisborne District. and/or tidy appearance? (3 cases) 5.1 Existing Decision NO (24 cases) Tree Applied to 3. Well satisfied with present low input system and not considered organic YES Gisborne District production (not against it either)? (0 cases) The decision tree for the organic/not organic decision NO (24 cases) developed in earlier research was found to be relevant to the situation in Gisborne District, 4. Organic farming is not technically or and only minor modifications financially viable but never really YES (2 cases) have been made. To avoid considered it? repetition of detail from previ- ous reports in this series, the NO (22 cases) details of how this method was applied to Gisborne can be 5. Organic farming is not sustainable? YES found in the Appendix. In the (0 cases) following figures, the decision tree for the Canterbury study NO (22 cases) (Fairweather 1996) is repro- DO NOT duced here. Two new decision GROW criteria, which identify addi- Go to FIGURE 5.2 ORGANIC tional motivations, are shown (5 cases) in italics. As before, the deci- sion tree comprises three main parts: the elimination criteria, motivations and constraints. Figure 5.1: The organic decision – elimination criteria The elimination criteria, if they

39 apply, mean that the grower does not seriously ered it. Figure 5.1 shows also that three criteria consider organic production and does not grow (criterion 1, 3 and 5) were not identified among organic products. The motivations specify the the 27 growers interviewed. It is inappropriate to main reason for either growing organic products conclude that these criteria are not relevant to or seriously considering growing organic prod- Gisborne District since the sample is smaller than ucts. The constraints identify situations which in the earlier studies and it may be that a larger mean that growers who want to grow organic sample would include growers who would ex- products are unable to. press these criteria. Further, this sample contained Returning to the elimination criteria, Figure larger proportions of organic growers and proc- 5.1 shows that only two were found to be relevant essed crop or horticultural growers and smaller in this study of growers in Gisborne District. proportion of pastoral farmers compared to the Criterion 2 applied to three growers who were Canterbury study. It is amongst this latter group well satisfied with their present farming system, that we would expect growers who have little had little need to change it, and therefore had not interest in, or experience of, organic production. really considered organic production. Criterion 4 Moving on to motivations for growing organic applied to two growers who believed that organic products, Figure 5.2 shows that all five of the production was not technically or financially motivations that drive growers to grow organic viable even though they had never really consid- products were identified in the Gisborne District study. Eight growers adhered to an organic philosophy, one (22 cases) grower was interested in organic production as a con- 6. Adhere to an organic philosophy sumer, one grower had experi- and/or concerned for the YES enced ill health, three were environment? (8 cases) attracted to premiums and one had experienced basic problems NO (14 cases) with conventional production. Figure 5.3 lists criteria which, if they apply, drive 7. Interest in organic farming as a growers to seriously consider consumer; don’t want chemicals in YES organic production and in- food? (1 case) cludes, in italics, the addition of NO (13 cases) two new criteria, (criterion 13 and criterion 14). Criteria 11 applied to one grower who 8. Your self, or member of family or staff, used chemicals but preferred or pet experienced ill health from YES not to use them, while Criterion chemicals? (1 case) 12 applied to one grower who was concerned with the soil. NO (12 cases) New Criterion 13 applied to two growers who emphasised that the market may demand 9. Attracted to premiums or need higher YES organic product, even though value products? (3 cases) there may be no actual price premium for organic products. NO (9 cases) New Criterion 14 applied to four growers who have learned that they do not have to spray 10. Experienced basic problems with YES so much. This criterion high- conventional production? (1 case) lights an important feature of the growers’ context in NO (8 cases) Gisborne District: there is widespread appreciation of the GROW potential in using fewer chemi- cal inputs. This awareness has a Go to FIGURE 5.3 ORGANIC number of sources. In one case, (8 cases) (14 cases) a grower had kiwifruit and was aware of the Kiwigreen pro- grams, in another, the wine industry movement towards Figure 5.2: Motivations for growing organic sustainable viticulture made

40 him realise the potential for reducing chemical made him realise that organic production should usage. These are examples of industry-level be considered. These four cases all serve to illus- changes influencing growers. In another case, the trate an awareness of the potential in using fewer grower accidentally learned that sprays were not chemical inputs. There are multiple sources of the essential at regular and high levels of application, idea but it is nonetheless a palpable part of the after a contractor failed to apply chemicals. Fi- growers’ context in Gisborne District. nally, one grower was a contractor and his obser- Criteria 11 to 14 apply to eight growers who vation of organic properties on which he worked have seriously considered organic production. However, only three of these eight go on to grow organic (8 cases) products. Criterion 15 applied to one grower who believed that organic production was not 11. Use chemicals but see them as technically feasible, and Crite- expensive and/or dubious value; rion 16 applied to four growers YES prefer not to use them; don’t like who believed that organic (1 case) sprays? production was not economic. NO (7 cases) Figure 5.4 shows constraints to the organic farming decision. In the Gisborne District study there were no constraints appli- 12. Concerned with soil or increasing YES cable, so there were no ‘Hopeful humus levels? (1 case) Organic’ or ‘Frustrated Organic’ growers. This result is not NO (6 cases) surprising since the Canterbury study started with approaches to organic growers who had con- 13. Market may demand organic YES tacted HWL and expressed product? (2 cases) interest in supplying peas. Many of these enquires were from organic smallholders. If similar NO (4 cases) proportions of organic small- holders were present Gisborne District, similar results may have 14. Learned that don’t have to spray YES been obtained. However, the so much? (4 cases) NO (0 cases) reality is that the total number of organic smallholders near Gisborne City is vastly less than CONSIDERED ORGANIC the number around PRODUCTION Christchurch, and it would be (8 cases) unreasonable to expect these criteria to be an important aspect of decision making in Gisborne 15. Organic production is not District. Finally, Figure 5.4 shows YES technically feasible how organic growers would (1 case) react to this hypothetical situa- tion of a decrease in organic premium. Of the 15 growers for 16. Organic production is not YES which there were premiums, economic (4 cases) there were three who would change to conventional produc- tion and 12 who would stay with organic production; two of GROW ORGANIC DO NOT whom would use a combination GROW ORGANIC of organic and conventional (3 cases plus methods. 14 cases earlier) (4 cases)

Figure 5.3: Further motivations and some constraints for growing organic

41 5.2 Discussion of Decision Making Two issues, therefore, need to be discussed. First, the unusual features of the wider grower While it is interesting to note that Gisborne group, and second, the position of the pragmatic did add two new criteria to the existing decision sweet corn growers. trees, it is equally important to reconcile the There are two notable responses in the wider findings from the decision tree with other sources group. Criterion 7 indicates that compared to of information in the Gisborne District itself. The other regions, there is a low level of demand for findings from strategic interviews with sweet corn organic food as a motivating factor. This confirms growers in Gisborne District highlighted concerns the interview findings in Section 3.4 that the about premiums and a pragmatic approach to domestic industry for organics did not provide a organic production that may cause problems in starting point for organic development. Criterion 8 the future. In contrast to this, the overall organic is perhaps even more interesting. All other regions grower group provided a much more familiar - especially Bay of Plenty - had growers that were picture with growers generally converting for a sensitive to health concerns relating to intensive wider range of reasons. agricultural methods. The low levels of chemical

(17 cases)

16. Present occupation takes to much DO NOT times? (No looking for an organic YES GROW ORGANIC crop.) (0 cases) NO (17 cases) DO NOT GROW ORGANIC and STILL 17. Not yet found organic product or YES still developing tecnique? (0 cases) LOOKING – “HOPEFUL ORGANIC” NO (17 cases)

DO NOT GROW 18. Family commitments and mortgage YES ORGANIC – prevent change? (0 cases) “FRUSTRATED ORGANIC” NO (17 cases)

GROW ORGANIC (17 cases)

20. If premiums decrease in future would you change to convention- YES No Premiums al production? (3 cases) 2 cases

NO (12 cases)

“COMMITTED “PRAGMATIC ORGANIC” ORGANIC”

Figure 5.4: Further constraints for growing organic

42 usage in many Gisborne crops perhaps created a farming environment where health concerns were not as prevalent. The pragmatic sweet corn growers are an interesting exception to the general pattern. Due to the specificity of answers given in constructing and presenting a decision tree, coupled with the small sample size, it is impossible to tag responses within the tree by farm type or respondent confi- dentiality would be potentially compromised. It is possible to comment, that while 3 cases were listed under Criterion 9 (attracted to premiums) and 2 cases to Criterion 13 (market may demand organic product), this group was disproportion- ately dominated by sweet corn growers as well as representing a large percentage of the hectares of certified organic land in the district. On observing the decision tree, one industry interviewee (Inter- view 1) suggested that the recent controversy between growers and HWL over premiums may have prompted some growers to disguise their intentions with regard to premiums, or had caused some growers to change their minds about why they were staying in the industry. While this could be construed as a criticism of the decision tree method, it could equally be argued that it simply reinforces the need to combine the findings of the decision tree interviews and the strategic interviews.

43 Chapter 6 niche production. Although organic horticulture in Gisborne has been largely evaluated in isolation Conclusion: the evolution from these trends, it is useful to reiterate at this point that it is strongly associated with the local move to niche production. of Gisborne’s organic Above all, however, the form and speed of the move to organic production in Gisborne District industry has been determined by the desires of one particu- lar company: Heinz-Wattie Ltd. Although the t is evident from the material presented in this dominance of HWL in the local organics industry report that there are a number of differences in is no longer as marked as in the period 1991-1995, Ithe evolution of organics in Gisborne District many of the lasting features of the industry can be as compared to that in Canterbury and Bay of explained by the specific supply and marketing Plenty. Once all four regional case studies in this needs of HWL, especially its need to establish research program have been completed, a full organic sweet corn production in order to solidify comparison of the various factors working for and its overall organic strategy for frozen vegetables. against the successful development of organic This case study attests to the significant influence food production will be presented. In the interim, that individual food processing companies can it is useful to summarise the specificity of the have on the evolution of organic production, and evolution of organics in Gisborne District. This on the more general trajectories for local economic goal is achieved in Section 6.1, while Section 6.2 development, in rural areas of New Zealand. considers some lessons from the Gisborne case Yet, it is also true that the longer-term survival study that can be applied generally to the organic of organic production in Gisborne – which now industry in New Zealand. appears to be relatively assured – is also depend- ent on local diversification in terms of organic 6.1 Key issues specific to crops and fostering synergies among a variety of organic processing firms. Increasingly, the success Gisborne of HWL’s organic sweet corn operation is depend- Some of the factors which distinguish the ent on organic squash and pea production. Diver- history of organic horticulture in Gisborne District sification is required for a successful evolution in can be attributed to the social, cultural and bio- organics because it facilitates crop rotation and physical features which were identified in Chapter inspires technological development. Although 2. The organic sweet corn growers who are evalu- Gisborne’s organic crop industry started from a ated in detail for this report exhibit a distinctively less advanced position than was the case for autonomous psyche towards organics and it is organic cropping in Canterbury, it has already possible that the effects of spatial isolation (which advanced well beyond the situation in Canterbury have – according to some accounts – engendered in terms of developing a potentially effective self-dependence and initiative in local economic rotation of organic crops. At least in the initial actors) contribute to these attitudes. Likewise, stages of the local evolution of organics, however, such obvious social problems in the district as the diversification has had an even more important high level of unemployment command that any role: it has led to the establishment of a range of new form of development is rapidly accepted. In purchasers which has, in turn, provided security this context, it is not surprising that organic for conventional growers who are otherwise wary horticulture has evolved so quickly in Gisborne: a about converting to organic production. Neverthe- sense of economic frustration, isolation and less, diversification can – in other forms – lead to desperation is a force which breaks down barriers destructive forms of competition. Whereas the to what might otherwise be seen as a fringe form development of organics in the other case study of development. In 1991, there were less than 10ha areas has not led to active competition for organic of certified organic land in Gisborne, but six years growers, there appears to be considerable poten- later there were over 400ha. Although there has tial for such competition in Gisborne, principally been an increase of certified organic land in all for sweet corn growers. horticultural areas of New Zealand during this While the diversification of organic crops, decade, the acceleration of conversions in techniques and companies within Gisborne Gisborne – despite the lack of any significant District may result in a secure future for organic history of organic production – has been impres- production there, one initially promising form of sive. It is highly probable that this trend is also local diversification appears less certain. In the related to the rapidity of agricultural restructuring early 1990s, it may have appeared that local Maori within the district. That restructuring has seen the had a significant role to play in the development transference of land from pastoral to horticultural of organic horticulture in Gisborne: the previous production, yet it is also associated with a move use and form of management of their land as well away from mainstream forms of horticulture to as what some consider to be a collective ethic of

44 sustainable land management may have facilitated concerns over some aspects of organic sweet corn the Maori adoption of organic production. How- production which may cause difficulties between ever, six years of interest shown by local iwi for growers and the BIO-GRO inspectorate in future. organic horticulture have yielded only one exam- The highly pragmatic attitudes of some Gisborne ple which can be heralded as a lasting success. growers appear to have led them to favour short- Organic farming – like any other form of economic term profit over longer-term issues relating to soil production – is not a panacea for the problems fertility. Although growers were initially con- which face contemporary Maori society. These cerned about weed and pest infestation in all case problems are more structurally rooted, so cannot study areas, the issue of soil fertility on organic be confronted by adopting one form of economic properties is now more salient and requires production over another: structural change needs further research. Furthermore, some growers have to take place in New Zealand society for Maori to an ambivalent attitude to the issue of whole- adequately take advantage of new economic property conversion and exhibit less “progressive opportunities in such sectors as organic horticul- conversion” to the wider (philosophical) merits of ture. In this report, the legal restraint on the use of organic production than comparable ex-conven- Maori land has been highlighted as a particularly tional growers in either Canterbury or Bay of difficult problem for Maori, as it prevents the Plenty. innovative use of land in multiple ownership. Given the prevalence of such land on the East 6.2 Wider issues relevant to the Coast, the resolution of the issue of leasing Maori land may be a significant determining factor for organic industry in New Zealand the future form of organic production in Gisborne District. The way Gisborne growers perceived organic Thus far, however, a more significant factor in premiums provides an important lesson for determining the characteristics of organic produc- companies and institutions with a desire to accel- tion in Gisborne has been its terra nullius status in erate organic production. The process of grower terms of organic production at the start of the recruitment and the way growers perceive recruit- decade. In many respects, this is the defining ment strategies are both more important, and less feature which separates the Gisborne case study predictable, than might have been expected. from those of Canterbury and Bay of Plenty. The Identical GOWW material produced significantly history of organic production in these other different results in Gisborne and Canterbury, regions was strongly contested and negotiated by suggesting that promotion of organics should be a variety of actors – some with a long-standing, more attuned to regional conditions and local ideological commitment to organic production attitudes. Ultimately, the long-term retention of and others with a more recently-formulated and growers will be dependent on a range of factors, pragmatic stance. The resultant form of organic not just organic premiums. Satisfaction with, for production in each of these areas reflected both example, the level of productivity can only be positions: a strong emphasis on organic exporting obtained when growers begin to take a long-term and the need for secure financial returns, tem- perspective on such issues as soil fertility, nutrient pered by an equally strong desire not to compro- (re)cycling and the nurturing of bio-diversity. mise established principles of organic farming. Such a perspective implies some form of conver- With an inherent lack of organic production for sion to the wider merits of organic horticulture. domestic consumption in Gisborne, both before Eventually, even the most pragmatic of ex-conven- and after the advent of organic exporting, similar tional growers will, therefore, have to confront negotiation and contestation has only occurred to their attitudes to horticultural practice. While the a very limited degree. As a result, a different range possibility of “progressive conversion” is real, it of attitudes to organics are presented by local would be preferable if this occurs much earlier, members of the organic industry in comparison to even at the recruitment stage. Furthermore, newly-converted, conventional farmers in the because there is the potential for organic premi- other case study regions. ums to dissipate in the long term, especially if This is most obvious in the uniquely local organic food becomes more mainstream and perception of organic premiums, especially in attracts a greater percentage of growers, premi- terms of the organic sweet corn premium as a ums alone should not form the sole basis of a principal motivating factor in the decision to grower’s commitment to organic production. convert. In Chapter 5, it was established that this This last point leads to the question of whether perception applies only to a small number of organic horticulture, especially in the highly- growers but, because these growers lead the local commercialised, export-oriented form which is organic industry through the relative size of their becoming increasingly important within New operations, it has had a significant impact on local Zealand, is ultimately different in its social attitudes to organics. The terra nullius condition makeup from other forms of horticultural produc- and the attitude to premiums also account for tion. Organic farming has been the recipient of

45 some of the more naive forms of romantic futurol- With the increasing universalisation of ‘green’ and ogy. Some academics and lay individuals tend ‘health’ concerns in the 1990s, however, large towards the suggestion that organics has some companies have become involved in organic inherent ability to solve all the characteristic production with the express desire to transfer problems of food commodity production: falling produce over considerable distances to affluent prices, tension between growers/processors, urban consumers. The fear of reviewers such as agricultural unemployment, the cost/price Friedmann (1993) is that the domestic and philo- squeeze, environmental degradation and so forth. sophically-committed movement will be either While there are undoubted environmental benefits subsumed or deformed by the inherently prag- that accrue from conversion to organic production, matic concerns of companies seeking to trade the social organisation of production for organic outside of local food production areas. The exporting in New Zealand still closely mirrors the Gisborne case does not fit into this schema, reveal- pattern for conventional horticulture. The export ing that the applicability of such theories might be form of organic production in New Zealand restricted to North American or European do- retains the basic elements of capitalist commodity mains. As is shown in Section 3.4, the reasons for systems which have caused instability in other the Gisborne case being an exception to the food production sectors. Consequently, it would theories of overseas researchers relate to the fact be naive to suggest that organic production under that little or no organic farming existed in the capitalism will also be a social panacea for food district before the advent of corporate actors and commodity producers. their export-orientation. At present, however, there is one advantage In the next case study of this series – Nelson/ that organic growers have in terms of their rela- Golden Bay – it will be confirmed that the export/ tionships with wider circuits of capital. Given that commercial sector has not been a parasitic influ- demand for New Zealand’s organic produce is ence on its domestic/philosophical equivalent in high in overseas markets and that relatively few New Zealand. Indeed, it can be argued that the growers who operate on a considerable scale have, two sectors are, to some extent, becoming interde- as yet, converted to organics, those that have enjoy pendent, with growth in one having a beneficial more downstream control than is typical for impact on the other (Coombes and Campbell, in conventional farmers. Furthermore, because the press.). That this mutual dependence has devel- requisite skills for organic production – and the oped can be partly attributed to the mediating farm-work required for the establishment of function of BIO-GRO NZ. Thus far, large compa- suitable biological rhythms on organic properties nies with an involvement in organics have been – take a considerable time both to learn and to vulnerable to bad press and, consequently, prod- take effect, the labour of some organic growers is, uct failure in overseas markets, so they have been at present, a highly valued commodity. This particularly concerned that their practice is seen as means that cooperatives of organic growers, like acceptable to BIO-GRO NZ. This has meant that Kiwi Organics43, have some degree of market the potential for conflict between agribusinesses leverage, even though this is not likely to last for involved in organics and the more long-standing long. There is no scope in this report to consider members of the alternative agriculture movement the degree to which organics in its export/com- in New Zealand has been reduced. If a prolifera- mercial form is different from either domestic- tion of organic labels occurs – especially in the oriented organic production or other forms of form of MAF-accredited but firm-specific criteria modern horticulture in terms of its impact on for organic production which is already evident in biophysical systems. However, the short-term Gisborne – then harmful divisions could develop attitudes of some growers to soil fertility on sweet within the New Zealand organics industry, be- corn properties in Gisborne suggests that there is cause the mediating function of a single organic need for future research on this issue. certifier will be lost. While the expansion of Nevertheless, some of the other fears that have organic production in Gisborne and, indeed, New emerged about the commercialisation of organics Zealand during the 1990s has been successful and are, in part, allayed by information in this report. relatively harmonious, there is no guarantee that Some North American reviewers (see, especially, this will always be the case. Friedmann 1993) are concerned about the com- mercialisation and commodification of the organ- ics industry, which was once an inherently local phenomenon. In conventional agriculture’s zenith, those interested in selling organic produce were largely left alone by large companies and sold goods to people in their local towns or regions.

43 See Section 4.2.3.

46 McLaren R.G. and Cameron K.C. (1990), Soil References science: an introduction to the properties and manage- Blaschke P.M. and Peterson D.R. (1994), Sustain- ment of New Zealand soils, Oxford University Press: able land management and the East Coast Forestry Auckland. Project, Office of the Parliamentary Commissioner for the Environment: Wellington. Oliver W.H. and Thompson J.M. (1971), Challenge and response—study of the development of the East Butterworth G.V. (1991), Nga take i neke ai te Coast Region, East Coast Development Research Maori 2: he iwi pokai whenua, Ministry of Maori Association: Gisborne. Affairs: Wellington. Perry M., Le Heron R., Hayward D.J. & Cooper I. Campbell H.R. (1996), Recent developments in (1997), Growing discipline through total quality organic food production in New Zealand: Part 1, management in a New Zealand horticultural Organic food exporting in Canterbury, Studies in region, Journal of Rural Studies, 13(3), 289-304. Rural Sustainability Research Report No. 1, Depart- ment of Anthropology: University of Otago, Roche M. (1996), Wattie and Heinz, in R. Le Heron Dunedin. and E. Pawson, Changing places: New Zealand in the nineties, Longman Paul: Auckland. Campbell H.R., Fairweather J.R. and Steven D. (1997), Recent developments in organic food Russell R. (1994), Tairawhiti organic producers and production in New Zealand: Part 2, Kiwifruit in consumers newsletter, October, Tairawhiti organic the Bay of Plenty, Studies in Rural Sustainability producers and consumers group: Gisborne City. Research Report No. 2, Department of Anthropol- ogy: University of Otago, Dunedin. Scott B. (1993), Area’s isolation seen as asset, Gisborne Herald, 23/6/93:7. Campbell H.R. and Coombes B.L. forthcoming, Green protectionism and the exporting of organic Scott B. (1995a), Croppers reply to criticism of fresh fruit and vegetables from New Zealand: chemical use, Gisborne Herald, 11/10/95:2. crisis experiments in the breakdown of Fordist trade and agricultural policies, Rural Sociology. Scott B. (1995b), Farmers cannot afford to avoid using chemicals, Gisborne Herald, 19/10/95:3. Conway D. (1990), Optimism mark of 80s middle years, Gisborne Herald, 6/1/90:8-9. Spense M. (1995), Petition against 2,4-D spraying gathers weight, Gisborne Herald, 20/9/95:12. Coombes B.L. (1997), Rurality, culture and local economic development, Unpublished Ph.D Thesis, Department of Geography: University of Otago, Dunedin.

Coombes B.L. and Campbell, H.R. in press De- pendent reproduction of alternative modes of agriculture: the relationship between export and domestic organic food production, Aotearoa / New Zealand, Sociologia Ruralis.

Davis S. (1995), Some plant protection issues for Wattie Frozen Foods Ltd., Address to the 48th New Zealand Plant Protection Conference, Hastings, 8 August 1995.

Friedmann H. (1993), After Midas’s feast: alterna- tive food regimes for the future, in Allen P. (ed.), Food for the Future: conditions and contradictions of sustainability, John Wiley and Sons: New York.

Hessel J.W.D. (1981), The climate and the weather of the Gisborne region, Reed: Wellington.

MAF [Ministry of Agriculture and Fisheries] (1968), Commercially grown sweet corn, Occasional Pamphlet 21, Wellington. 47 Appendix full range of farm sizes, farm types, level of activity (full or part time) and farm locations was Methods for included, where possible, since it is likely that these factors have a bearing on decision making. In this way the essential elements of decision understanding grower making can be identified but not their frequency in the population. decision making Table A.1 shows the characteristics of the growers in the sample. There was an approximate he results presented in this chapter are balance between the part-time and full-time derived from an interview program 44 growers. Inclusion of part-time growers recognises Tfocussed on a variety of growers . The that for many growers in Gisborne District their interviews were used to identify key ideas and horticultural operations are frequently comple- attitudes held by farmers and growers themselves mented by off-farm work. In terms of farm type, when making management decisions, and from there were mostly horticultural land uses (21 these to identify their decision criteria. The princi- cases) supplemented with some livestock land pal element of the research design was to compare uses (five cases). the decision making of two distinct groups, All the predominant land uses in Gisborne namely organic and conventional growers. To this district were included, with a relatively larger end, interviews were arranged with a total of 27 number of horticultural and processed crop growers, including 15 who were organic, seven growers (sweet corn, peas, and other vegetables). who were conventional and five who were chang- The selection reflects the significance of organic ing between conventional and organic (see Table fruit and vegetable production in Gisborne Dis- A.1). Since the objective was to identify most of trict. It should be noted that the classification has the reasons for organic farming or for conven- taken the predominant land use for each grower: tional farming it was appropriate to use not a in many cases there are a number of different land random sample of growers but a theoretically uses, including cases that have significant live- ordered sample in which diverse types of growers stock and horticultural activities. The table also were sought and included in the study. Thus, the shows the certification status of the growers. Most (15) were organic as Farm status: part time 13 stated by them and about one quarter (8) were conventional. full time 14 However, three conventional horti- 27 cultural growers had modified their conventional management by Farm type: Livestock: sheep/beef 3 decreasing their use of sprays to the deer 2 extent that they were very close to Horticulture: processed crop 9 organic in practice. They were not planning to seek formal certifica- citrus 3 tion. pip fruit 3 The sample of growers inter- grapes 3 viewed provided suitable diversity persimmon 3 in order to obtain a variety of honey 1 decision criteria. However, com- 27 pared to the Canterbury study, there were fewer conventional growers and fewer conventional land uses Certification status: Organic such a pastoral farming. (in part or in whole) 15 To obtain names of growers, a Changing from organic variety of techniques were used. to conventional 1 The BIO-GRO list for Gisborne was Changing from conventional used to locate 22 organic growers and all except four were inter- to organic 3 viewed. In addition, each grower Conventional 8 interviewed was asked to provide 27 the names of other growers in order to obtain an extended list of names. Figure A.1: Summary of Characteristics of Growers in the Sample They suggested conventional

44 Including both pastoral and horticultural producers.

48 growers, typically with land uses similar their prior to surveying growers with two conse- own. Finally, growers were visited without prior quences. First, growers are forced to answer contact and requested to participate. A total of 29 according to categories that conform to the re- growers were interviewed on their properties searcher’s expectations, and second, that the during April 1997. researcher is unable to assess unexpected or All growers were interviewed in person. The unanticipated factors that the growers themselves interviewing procedure consisted of an introduc- can immediately identify. tion followed by a brief explanation of the overall Once the interviews are completed the deci- project and its general objectives. Then an expla- sion criteria identified in the interviews are then nation was provided for the focus of this study on combined in the form of a decision tree, or set of the decision making process of organic and ‘if-then’ rules. Ethnographic decision tree model- conventional growers in an attempt to learn the ling seeks to develop a complete decision tree reasons why, or why not, people farmed organi- comprising a series of connecting decision criteria. cally. The interviewer stated that his expertise was The decision criteria are discrete questions, an- in social science, not in farming or organic produc- swers to which are either true or false for any tion. All interviews were tape recorded and particular interviewee. The tree must allow each detailed notes were made while subjects were interviewee to move progressively through a set speaking. Nearly all interviews were located in the of criteria to arrive at an outcome which is true for subject’s house and typically at the kitchen table. that interviewee. In addition the tree must com- The interview began with the subject giving a bine criteria for all members of the sample group thumb-nail sketch of the farm situation, including in a logical way. The tree thus tells why a particu- a brief description of the type of farm. It then lar outcome is reached because the outcome is moved on to details of what stock or crops were preceded by a particular set of criteria relevant to grown and why. Then the farmers were invited to that particular interviewee. However, the criteria talk about why they had their particular approach are not imposed by the researcher but are derived to farming. A check list of questions was used carefully from analysis of the open-ended inter- occasionally through the interview, but more views to record what the farmers or growers typically at the end of the interview, to ensure that themselves state and believe. The interview data key topic areas were included in discussion. must be carefully examined to learn what criteria However, most of the interviews proceeded in motivate the subjects’ decision making, and then their own way to cover all of the relevant topics. these criteria are gradually integrated into a Growers generally enjoyed explaining their views complete decision tree. In this Gisborne study the and there was little need to ask any questions. identified decision criteria were compared with Each interview took about one hour. The objective those found earlier using the existing decision of the interview was to record thoroughly all of tree. the main considerations the grower brought to bear on decision making with respect to organic or conventional production. The ethnographic decision tree model ap- proach was used in order to develop an under- standing of growers’ attitudes and decision making regarding organic production. Decision tree research examines real world decisions where any choice is made and, while it is based on individual interviews, the decisions of a group of people are examined and interpreted to develop a decision tree model. The method uses ethno- graphic interviewing to elicit from the decision makers themselves their own decision criteria. Ethnographic interviewing involves approaching farmers or growers in a way that acknowledges their expertise in managing a farm or orchard, and is attentive to what they believe and why they manage in the way that they do. Interviews explore farmers’ or growers’ thinking and record in their own terms their reasons for actions, and constraints that determined some outcomes. It is this kind of approach which distinguished ethno- graphic decision tree modelling from other ways of analysing decision making. Other approaches have tended to form decision making models

49